By Terryn Shiells and Phil Franz-Warkentin
Winnipeg, July 22 – ICE Futures Canada canola contracts ended narrowly mixed on Tuesday, consolidating after a volatile trading day that saw prices drop to fresh contract lows.
Speculative based selling, as they added to their already large short position, helped to weigh on prices, as did spillover from the weakness in Chicago soyoil, analysts said.
Traders who bet canola prices would move higher after news that parts of Saskatchewan and Manitoba were flooded were also liquidating long positions.
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On the other side, uncertainty surrounding how much damage has been done by the floods in parts of the Canadian Prairies remained supportive overall.
Slow farmer selling, steady commercial demand, worries about dryness in parts of Alberta and oversold price sentiment were also bullish.
About 15,639 contracts traded on Tuesday, which compares with Monday when 23,679 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted wheat prices after Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade were mixed on Monday, with an eight cent gain in the nearby August contract, but losses of up to 14 cents per bushel in the more active new crop months.
The weekly USDA crop progress report showed that 73% of the US soybean crop was in the good-to-excellent category as of July 20, which was up one percentage point from the previous week.
Chart-based selling contributed to the losses, as prices fell below nearby support.
However, while Midwestern conditions remain close to ideal for crop development, forecasts calling for possibly damaging dry conditions within the next two weeks were somewhat supportive. Solid export demand helped underpin the futures as well.
SOYOIL futures were down on Tuesday.
SOYMEAL futures were mostly lower on Tuesday, taking some direction from the losses in soybeans.
CORN futures in Chicago were down two to four cents per bushel on Tuesday, as favourable US crop conditions helped take prices to fresh four-year lows once again.
The US corn crop was rated 76% good-to-excellent in the latest weekly report, which was unchanged from the previous week but still well ahead of normal for this time of year and the best ratings in more than a decade. Better-than-average rains, coupled with cooler temperatures, were helping the developing crops, according to analysts.
Chart-based selling contributed to the declines, with some speculative sell-stops hit on the way down.
However, some oversold price sentiment was supportive, according to participants.WHEAT futures in Chicago closed three to five cents per bushel lower on Tuesday, as an early an attempt at a short-covering bounce proved short-lived and prices re-tested the four-year lows hit on Monday.
Ample global supplies, and ideas that US wheat remains overpriced in the global market, contributed to the bearish tone in wheat.
The advancing US winter wheat harvest was also overhanging the market.
• US wheat export inspections for the week ended July 17 came in at just over 515,000 tonnes, which was ahead of trade expectations, but still behind the year-ago level.
• Monsoon rains in India were 43% behind normal, as of the middle of July. More rainfall will be needed over the next two weeks, or yields in the country will be hurt.
• Chinese researchers have created a new wheat variety resistant to the powdery mildew fungus. The wheat was created by cutting out specific genes in the plant, rather than by inserting foreign DNA, according to reports.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
