By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
Winnipeg, Dec. 8 (CNS Canada) – ICE Futures Canada canola were down sharply on Thursday, as losses in the Chicago Board of Trade soy complex weighed on values.
Concerns the US may adjust its renewable fuel policy accounted for much of the weakness in soyoil which spilled into canola, according to participants. Donald Trump’s pick to head the Environmental Protection Agency, Scott Pruitt, is a noted climate change skeptic who has criticized the renewable fuels standard in the past.
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Given Pruitt’s pro-oil stance, there are ideas that the EPA’s soyoil-supporting biofuel policies may be on the chopping block.
Technical selling contributed to the losses in canola, as the market backed away from its nearby highs.
While crush margins eroded on Thursday, they still remain at some of their best levels of the past year which provided some underlying support. A lack of significant farmer selling also kept the losses in check.
About 31,281 canola contracts were traded on Thursday, which compares with Wednesday when 32,738 contracts changed hands.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
WHEAT futures in Chicago climbed five to seven cents per bushel higher on Thursday as an arctic cold front descended on parts of the US Plains. Much of the crop is suffering from a lack of snow, which leaves the plants more vulnerable to the cold.
Weekly export sales came in slightly ahead of traders’ estimates, which was supportive.
On the other side, investors expect the USDA to boost its projections of global wheat ending stocks in Friday’s supply and demand report, which was bearish.
SOYBEAN futures at the Chicago Board of Trade dropped 20 to 22 cents per bushel as commercials went on a selling spree. Much of the fear was sparked by Donald Trump’s appointment of Scott Pruitt as head of the Environmental Protection Agency. Pruitt has criticized the agency in the past and isn’t considered to be a proponent of bio-diesel, which is often made with soybeans.
Favourable growing conditions for the soybean crop in South America added to the bullish tone.
On the other side, export sales for the week were slightly above average, which helped prop up prices.
SOYOIL futures were also lower on Thursday due to fears over the future of the bio-diesel market.
SOYMEAL futures dropped on the day.
CORN futures in Chicago fell three to four cents per bushel, as speculation grew the USDA would hike its estimate for US corn stockpiles in its Friday report.
Spillover losses in soybeans contributed to the declines.
On the other side, export numbers on the week exceeded expectations which lent support to prices.
