North American Grain/Oilseed Review: Canola continues downward slide

By Phil Franz-Warkentin and Dave Sims, Commodity News Service

Winnipeg, Nov. 20 – ICE Futures Canada canola contracts were weaker on Friday, posting losses for the fourth straight session as prices tested fresh two-month lows once again.

In addition to the bearish chart signals, and resulting speculative selling, canola also saw some spillover pressure from the losses in CBOT soybeans.

Large supplies overhanging the market also weighed on prices, limiting any aggressive end user demand, according to traders.

However, exporters and domestic crushers were still making purchases on a scale-down basis – especially as weakness in the Canadian dollar and gains in CBOT soyoil helped crush margins improve.

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About 26,425 canola contracts were traded on Friday, which compares with Thursday when 33,447 contracts changed hands. Spreading accounted for 17,610 of the contracts traded.

Milling wheat, durum, and barley were all untraded.

Corn futures on the Chicago Board of Trade ended slightly lower Friday, feeling some pressure from losses in wheat.
US corn is having trouble competing with cheaper supplies in South America.
Continued interest from China continues to prop up values.

SOYBEAN prices fell two cents per bushel lower Friday, as fresh weather forecasts called for rain to hit drought-stressed soybean fields in Brazil.

There is intense speculation Argentinean soybean farmers are preparing to dump large supplies onto the market as soon as the country’s export tax is lowered. An election is taking place this weekend.
However, soybeans continued to enjoy support from yesterday’s USDA report which pegged soybean export sales at 1.798 million tonnes.

Soyoil rose 35 points higher Friday on speculative trade.

SOYMEAL futures dipped on slightly weaker demand from the livestock sector.

Wheat futures on the Chicago Board of Trade drifted two cents per bushel lower Friday, as traders took profits before the weekend.
Rain in the US Southern Plains is expected to help the winter wheat crop develop, which was bearish.
A recent decline in US wheat prices seems to have prompted some interest in booking orders, according to a report.

– Tunisia bought 125,000 tonnes of soft wheat, 92,000 tonnes of durum wheat and 50,000 tonnes of feed barley in an international tender on Thursday.

– Fires in Australia could conceivably destroy as much as four percent of the country’s grain output this year, according to reports.