North American grain/oilseed review: Canola falls to one-month lows

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm — The ICE Futures canola market fell to its lowest levels in a month on Wednesday, as bearish chart signals and losses in outside markets weighed on values.

A lack of end user demand contributed to the declines, with exporters and domestic crushers thought to be covered for the time being. Speculative funds were also adding to their short positions as canola fell below nearby chart support levels.

Chicago soyoil, European rapeseed and Malaysian palm oil futures were all lower on the day.

Expectations that Canada’s canola production ended up well below the 19 million tonnes currently forecast by Statistics Canada provided some support.

There were an estimated 55,711 contracts traded on Wednesday, which compares with Tuesday when 36,183 contracts traded. Spreading accounted for 30,450 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, as rising South American production prospects and concerns over potential U.S. trade polices of President-elect Donald Trump weighed on values. Losses in global vegetable oil markets added to the bearish tone.

The U.S. Department of Agriculture reported private export sales of 202,000 tonnes of soybeans to China this morning, with an additional 226,200 tonnes to other unknown destinations.

However, buying interest is thought to be subsiding amid aggressive offers out of Brazil and relatively favourable crop conditions in the South American country.

CORN saw spillover selling pressure from the losses in soybeans but managed to move higher with wheat.

Average daily ethanol production in the U.S. eased off last week’s record high to come in at 1.11 million barrels per day in the latest data. Supplies of the renewable fuel at 22.5 million barrels were up by half a million barrels on the week.

WHEAT continued to find support from the escalating conflict between Russia and Ukraine, with traders concerned over grain shipments from the region as Ukraine launched more long-range missile attacks. However, ideas that the gains were starting to look overdone did slow the advances today.

Improving crop conditions for U.S. winter wheat also limited the gains.