By Phil Franz-Warkentin, MarketsFarm
WINNIPEG–The ICE Futures canola market was weaker on Tuesday, with a general ‘risk off’ sentiment in the global commodity and financial markets weighing on values.
Mounting global recession fears weighed heavily on many markets, with crude oil, Chicago soyoil, European rapeseed, and Malaysian palm oil all posting sharp losses.
The Canadian dollar was also caught up in the selling pressure, losing over a cent relative to its United States counterpart. The softer currency helped temper the declines in canola, with prices well off their session lows by the close.
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About 27,105 canola contracts traded on Tuesday, which compares with Monday when 12,594 contracts changed hands. Spreading accounted for 10,236 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade posted sharp losses on Tuesday, caught up in the broad global selloff as activity in the United States markets resumed following the Fourth of July holiday. Speculators continued to bail out of long positions, with some chart stops likely hit on the way down exaggerating the move.
News that Indonesia was encouraging more palm oil exports contributed to the losses in world vegetable oil markets, spilling into the soy market. There were also reports that China had cancelled several old crop purchases of U.S. soybeans, although that business will likely be rolled forward to the new crop.
Relatively favourable Midwestern crop conditions also weighed on the soy complex.
CORN was down in sympathy with most everything else, hitting its weakest levels in five months.
Forecasts call for some timely rains across the Corn Belt over the next week, which should keep the grain under pressure.
Weekly crop ratings were delayed by the Independence Day holiday.
WHEAT was also weaker, with the advancing U.S. winter wheat harvest contributing to the declines.
Canadian wheat plantings were pegged at 25.4 million acres, which was up from earlier estimates and would mark the largest acreage base to the crop in nearly a decade.
Egypt bought 444,000 tonnes of wheat in a tender, providing some support, although most of the wheat was sourced from Russia, France and Romania.
