By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, July 7 – Canola contracts on the ICE Futures Canada trading platform ended sharply lower on Tuesday, as the funds sat on the sidelines while speculators and end users sold off their positions, analysts said.
Much of the weakness was linked to spillover pressure from large losses seen in Chicago soybean and soyoil futures, brokers added.
Sentiment that canola is looking expensive relative to other oilseeds added to the bearish tone.
Some of the selling was also linked to forecasts calling for beneficial rainfall in the dry areas of Western Canada this week. Though, temperatures are expected to be very hot as well, which could put further stress on crops.
Read Also
Canadian Financial Close: C$ steady Friday
Glacier FarmMedia — The Canadian dollar held steady on Friday as investors squared positions ahead of the weekend. The Canadian…
The Canadian dollar moved sharply lower, which was supportive, as it made canola less expensive to foreign buyers.
About 18,729 contracts traded on Tuesday, which compares with Monday when 15,049 contracts changed hands. Spreading accounted for 4,208 of the trades.
Milling wheat, durum and barley futures were all untraded. Though, the Exchange moved wheat prices lower following Tuesday’s close.
Soybean futures on the Chicago Board of Trade dropped 28 to 31 cents per bushel on Tuesday, amid widespread fears that a selloff in Chinese stocks reflected a broader economic downturn. Values ultimately settled below the psychologically-important US$10 a bushel mark.
Prices were also pressured by stronger-than-expected crop conditions. The USDA reported that 63% of the US soybean crop was in good or excellent shape, a higher tally than expected.
Growing estimates for South American production also led to the sell-off, according to a report.
Soyoil futures in Chicago recorded massive losses on the day, dropping 122 to 188 points, amid worries over China’s economic situation.
Soymeal futures also finished lower on the day.
Corn futures on the Chicago Board of Trade ticked lower Tuesday, falling one to three cents per bushel, due to better-than-expected crop conditions. Roughly 69% of US corn was reported to be in good or excellent condition (as of Sunday) by the USDA. That is one percentage point better than last week.
Concerns over the state of the Chinese economy and the Greek debt crisis prompted funds to become sellers, according to a report.
The December contract appears to have established a range of C$4.05-$4.30 per bushel.
Wheat futures on the Chicago Board of Trade fell nine to 11 cents per bushel Tuesday, as concerns over China’s tepid economic situation weighed on values.
Prices were also pressured by reports farmers made significant progress over the weekend in the relatively dry eastern half of the US Midwest. About 55% of the winter wheat crop was harvested as of Sunday, well ahead of the 38% average collected a week ago.
Favourable weather conditions in Russia have also boosted expectations that the country’s crop will be larger than initially expected.
– According to a report, people in Ukraine will consume 28.1 million tonnes of grains and leguminous crops in 2015/16, a decrease of 4% compared to 2014/15 (29.2 mln tonnes).
– Pakistan produced 5 million metric tons of wheat from the recently concluded harvest, well below the 6.2 million ton target, analysts said.
– Scientists at the Northwestern Agricultural Research Centre in the US have developed a wheat variety they say is resistant to wheat midge, which has caused millions of dollars in damage to Montana crops in the last 10 years, according to a report.
Settlement prices are in Canadian dollars per metric ton.
