ICE Canola Futures Weaken as Outside Oilseeds Decline

The e-CBOT soybean complex was mixed overnight while Malaysian palm oil and European rapeseed futures were slightly lower. Global crude oil values were on the defensive early and was helping to weigh on the oilseed markets in general. The North American equity markets were experiencing movements to both sides of the plus/minus line in early activity.

News that CONAB, Brazil’s supply agency, increased its soybean crop estimate to 58.1 million metric tons from 57.6 million was viewed as an undermining price influence for the oilseed sector. However, most market participants will be waiting for the USDA’s updated supply/demand estimates due out on Thursday morning. Those estimates will include soybean production forecasts for both Argentina and Brazil.

Canola futures were also being undermined by sentiment that the commodity was overbought and in need of a downward correction, traders said.

Underlying support in canola was stemming from slow farmer deliveries to the country elevator system in western Canada and from steady domestic processor demand in view of profitable crush margins, traders said.

The pricing of routine export business was helping to keep a firm floor under canola, brokers said.

Uncertainty surrounding 2009 Canadian canola acreage was also a supportive price influence.

Activity in canola was expected to be on the lighter side as market participants wait out Thursday’s supply/demand tables, traders said.

As of 9:42 am EDT, there were 472 canola contracts traded.

At 9:42 am EDT, no western barley contracts had traded with prices unchanged. Brokers were anticipating much of the activity in barley to consist of fund repositioning.

Prices in Canadian dollars per metric ton at 9:42 am EDT: