North American grain/oilseed review: Canola selloff continues

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market dropped for the third session in a row on Wednesday, settling just above major support levels as chart-based selling pressure and a lack of significant end user demand weighed on values.

Relatively favourable Prairie crop conditions for the new crop and large old crop stocks still being held by farmers contributed to the declines.

Chicago soyoil, European rapeseed and Malaysian palm oil futures were all down as well, adding to the weaker tone in the Canadian oilseed.

Weakness in the Canadian dollar relative to its United States counterpart provided some underlying support, as currency traders reacted to the Bank of Canada’s decision to cut interest rates.

There were an estimated 66,036 contracts traded on Wednesday, which compares with Tuesday when 68,027 contracts traded. Spreading accounted for 40,300 of the contracts traded.

WHEAT futures in the United States posted losses for the sixth session in a row, as easing concerns over production issues in Russia and the advancing U.S. winter wheat harvest weighed on values.

Forecasters Sovecon lowered their call on Russia’s wheat crop to only 80.7 million tonnes, which was down by 1.4 million tonnes over just the past week and well below earlier estimates from a month ago topping 90 million tonnes.

While recent frosts that were followed by heat and dryness cut into the size of the Russian crop, most of those concerns appear to be priced into the futures for the time being. Meanwhile, Russia is also thought to be unlikely to ban exports.

The U.S. winter wheat harvest was six per cent complete as of this past Sunday, with good weather conditions allowing farmers to make more progress this week.

SOYBEANS had moved higher overnight, but sharp losses in soyoil spilled over to pull beans lower as well. Speculative fund selling and a lack of significant export demand for U.S. soybeans, as more buying interest shifts to South America, weighed on prices.

CORN was pulled lower by losses in wheat, with good Midwestern weather also bearish as farmers wrap up their seeding operations.

However, heat and dryness hurting Mexico’s corn crop could open the door for more U.S. exports to the country going forward, which provided some support.