By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 21 (CNS Canada) – ICE Futures Canada canola contracts were down on Tuesday, as losses in Chicago Board of Trade soyoil and Malaysian palm oil weighed on values.
Crush margins have lost roughly C$50 per tonne over the past month, and continued to weaken on Tuesday; which limited end user demand, according to participants.
Relatively favourable South American production prospects weighed on the oilseeds in general, including canola.
However, a lack of significant farmer selling did provide some underlying support. Concerns over tightening supplies going forward were also supportive, with the old/new crop spread narrowing in slightly.
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About 24,833 canola contracts were traded on Tuesday, which compares with Friday when 28,681 contracts changed hands. Spreading was a feature, accounting for 18,972 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down by 3 to 6 cents per bushel on Tuesday, hitting their lowest levels in two weeks.
Good South American crop weather was behind some of the selling pressure, with the soybean harvest in Brazil about a quarter done and expectations mounting for a record large crop.
Conditions in Argentina remain relatively favourable as well, and cheap South American supplies will soon be displacing US beans in the global export market.
However, recent rains in Argentina do have the potential to cause problems if the moisture persists, which helped temper the declines to some extent.
The USDA holds its annual outlook forum later in the week, and positioning ahead of the upcoming supply/demand forecasts was another feature.
SOYOIL futures were lower on Tuesday, with losses in Malaysian palm oil weighing on values.
SOYMEAL futures were down on Tuesday, following soybeans.
CORN futures in Chicago were up by 1 to 2 cents per bushel, as some fresh export business provided support.
The USDA reported sales of 270,000 tonnes of US corn to Japan and an additional 111,000 tonnes to unknown destinations.
Ideas that the South American corn crop may not be as large as forecasted by the USDA provided further support.
However, the losses in soybeans did put some spillover pressure on the market. Strength in the US dollar index was also said to be somewhat bearish.
WHEAT futures in Chicago were down by four to five cents per bushel on Tuesday.
The strengthening US dollar accounted for much of the declines in wheat, as the rising currency will make US wheat more expensive for international buyers.
However, the latest export news was still favourable with about 560,000 tonnes of US wheat inspected for export in the past week.
