By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Aug. 15 (MarketsFarm) – The ICE Futures canola market was weaker on Monday, as concerns over the Chinese economy sent shockwaves through the global financial and commodity markets.
A slowdown in China’s rate of inflation saw the country’s central bank unexpectedly cut interest rates on Monday, triggering losses that spilled into canola. Crude oil, Malaysian palm oil, Chicago soyoil and European rapeseed futures were all weaker.
Relatively favouable Midwestern weather forecasts contributed to the declines in the North American grains and oilseeds, but hot temperatures and only minimal precipitation expected for the Canadian Prairies provided some underlying support for canola.
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Weakness in the Canadian dollar also helped temper the declines in canola.
About 23,804 canola contracts traded on Monday, which compares with Friday when 19,383 contracts changed hands. Spreading accounted for 12,868 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Monday, as global markets reacted to economic news out of China.
In addition to the Chinese economic uncertainty, lingering bearish sentiment from last week’s United States Department of Agriculture monthly supply/demand report added to the selling pressure in soybeans. The USDA raised its forecast for U.S. soybean yields to 51.9 bushels per acre, surprising market participants who had generally expected to see a downward revision from the 51.5 bushel per acre previous estimate.
Cooler Midwestern weather with some welcome rains in the forecast should aid in crop development, adding to the weaker tone in beans.
CORN was also caught up in the broad selling pressure, with chart-based selling adding to the declines as some stops were likely hit on the way down.
The good Corn Belt weather also weighed on values.
However, the persistent European drought has cut into corn production there providing some underlying support.
WHEAT moved lower in sympathy with most everything else, with the strengthening U.S. dollar especially bearish as it makes U.S. exports less competitive on the global market.
However, wheat did uncover some support to the downside and settled well off its session lows.
