By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG, July 21 – ICE Futures Canada canola contracts ended sharply lower on Monday, with the November future nearing its mid-February contract low of $431.50 per tonne. Prices were finding some spillover pressure from the losses seen in the Chicago soybean complex.
The declines in canola were also linked to speculative selling, as they added to their already large short position, analysts said.
The market’s technical bias remains pointed lower, which also contributed to some of the price softness, traders said.
Read Also
Canadian Financial Close: Loonie, TSX rise ahead of Labour Day
Glacier FarmMedia — The Canadian dollar ended the week with its highest close in a month. The loonie closed at…
Good weather for US soybean crops and improving forecasts in Western Canada added to the bearish tone.
However, slow farmer selling and uncertainty about how large the Canadian canola crop will be due to weather problems this year limited the declines.
About 23,679 contracts traded on Monday, which compares with Friday when 17,011 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices lower after Monday’s close.
SOYBEAN futures at the Chicago Board of Trade settled one to 14 cents per bushel lower on Monday, with the new crop months seeing the biggest declines.
Good export demand and the tightening old crop supply situation were supportive for soybeans, as China has been a good buyer recently.
However, Midwestern growing conditions remain close to ideal for the 2014 crop and the favourable weather accounted for some of today’s selling pressure, according to participants.
SOYOIL futures were down on Monday, with continued weakness in the global vegetable oil markets weighing on values.
SOYMEAL futures were mostly lower on Monday, taking some direction from the declines in soybeans.
CORN futures in Chicago were down six to seven cents per bushel on Monday, as favourable US crop conditions sent prices to fresh contract lows.
Sporadic shower activity and cooler temperatures are expected to help the corn crop as it goes through its key pollination stage of development. In addition, warmer and drier weather in the longer range forecasts will also be beneficial as the crops mature.
Chart-based selling contributed to the declines, as corn dropped to its lowest levels in four years.
However, some oversold price sentiment was supportive, according to participants.
WHEAT futures in Chicago were narrowly mixed, although the two nearby contracts were both down two cents. Minneapolis and Kansas City wheat futures were down 3 to 7 cents per bushel.
The losses in corn and soybeans accounted for some spillover selling pressure in wheat. The advancing US winter wheat harvest was also bearish for prices.
However, ongoing uncertainty over the situation in Ukraine, which is a major world wheat exporter, did remain somewhat supportive.
• India’s government will decide Wednesday whether or not it will ratify a World Trade Organization trade deal that needs to be approved by all member countries. India has said it would not back the deal in the past due to limitations that would be placed on its own domestic programs.
• European farmers are reportedly holding back on post-harvest wheat sales due to low prices.
• Egypt purchased 60,000 tonnes of wheat from the Black Sea region in its latest tender, according to reports. However, officials with the world’s largest wheat importer said imports could decline by 30% going forward if subsidy reforms work as planned.
• Heavy rains have raised quality concerns with France’s wheat crop.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
