By Terryn Shiells and Jade Markus, Commodity News Service Canada
Winnipeg, August 18 – Canola contracts on the ICE Futures Canada trading platform ended sharply lower Tuesday, as technical selling – sparked by a break below key support levels – was bearish.
The November canola contract dropped under key technical support at C$480 per tonne, opening the door to further weakness in the market, analysts say.
The declines were also linked to spillover pressure from the losses seen in Chicago soybean and soyoil futures.
Reports that the canola harvest is underway in some parts of Western Canada also weighed on values.
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However, concerns about forecasts calling for wet weather slowing harvest progress in parts of Western Canada this fall were supportive.
There’s also still enough uncertainty about the size of the 2015/16 Canadian canola crop to keep some caution in the market.
About 23,497 contracts traded on Tuesday, which compares with Monday when 9,346 contracts changed hands. Spreading accounted for 11,278 of the trades.
Milling wheat, barley and durum futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade closed lower Tuesday as favourable growing conditions had a bearish effect on prices.
Recent rains in the US Midwest, with more expected to come, will benefit soybean crops at a critical point in the growing cycle, analysts say.
Market watchers say residual concerns about China’s economy added to the bearish tone.
SOYOIL prices settled weaker on Tuesday following soybean futures.
CORN futures closed stronger on Tuesday, as a weekly USDA report released on Monday reduced the condition rating for the crop by one point.
The US Department of Agriculture said that as of Sunday 69 per cent of corn crops are in good-to-excellent condition, which is down from 70 per cent the week earlier.
WHEAT futures in Chicago closed lower Tuesday as the US has been seeing good moisture ahead of seeding next year’s winter wheat.
Market watchers say technical signals, which indicate when it would be a good time to sell or buy, are bearish.
The USDA boosted its rating for spring wheat crops, with 70 per cent of crops listed in good-to-excellent condition, a one per cent increase from last week, which also pressured prices.
– Analysts say the US spring wheat crop is 53 per cent harvested, which is 22 per cent above the 5-year average of 31 per cent.
– Brazil has tenders to purchase 146-thousand metric tonnes (TMT) of wheat. They are expected to buy 30-TMT from Australia, 35-TMT from Canada and 81-TMT from the US, market watchers say.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
