North American grain/oilseed review: Canola falls to two-week lows

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market was weaker on Tuesday, falling below nearby support and hitting fresh two-week lows.

Technical signals kept speculators on the sell side of the market, putting on fresh short positions after covering some of those bearish bets earlier in July.

Losses in outside markets were also spilling over to weigh on the canola market, with Chicago soybeans, European rapeseed and Malaysian palm oil all weaker on the day. However, a firmer tone in Chicago soyoil provided some support.

Relatively favourable North American weather conditions also pressured the market, although the nearby Prairie forecasts remain hot and dry.

There were an estimated 70,128 contracts traded on Tuesday, which compares with Monday when 56,957 contracts traded. Spreading accounted for 26,838 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were pressured lower by relatively favourable United States weather forecasts on Tuesday, with welcome rains and more moderate temperatures expected in key growing regions over the next week.

U.S. soybeans were rated 67 per cent good-to-excellent in the latest weekly U.S. Department of Agriculture report. That was down one point from the previous week, but in line with trade estimates. Pod setting came in at 44 per cent, which was slightly ahead of the five-year average of 40 per cent.

A lack of major export demand, along with the fact U.S. farmers are still holding large old crop supplies that they’ll need to sell to free up bin space before the upcoming harvest contributed to the declines.

CORN was also pressured by the lack of any major weather threats, touching fresh contract lows in some months.

The U.S. corn crop was pegged at 77 per cent good-to-excellent, improving one point from the previous week.

Farmers in Brazil were reportedly making good progress bringing in the last of the second corn crop, with the harvest well ahead of average at 91 per cent complete.

WHEAT was down, as seasonal harvest pressure and stiff export competition out of Russia weighed on values.

The U.S. winter wheat harvest was 82 per cent complete as of this past Sunday, two points ahead of average.

Spring wheat in the country lost three points in the good-to-excellent category, now at 74 per cent.

Declining production estimates out of France were somewhat supportive, with some estimates pointing to the smallest wheat crop of the past 40 years.