North American grain/oilseed review: Canola weakens Tuesday

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market was weaker on Tuesday, trading just above contract lows as losses in the Chicago soy complex and bearish technical signals weighed on values.

The most-active November contract moved below its 20-day moving average, encouraging additional speculative selling.

European rapeseed and Malaysian palm oil futures were also down on the day, although canola remains cheap compared to most other oilseeds which tempered the declines.

Seasonal harvest pressure was also thought to be weighing on prices, although farmers remain reluctant sellers at current levels.

There were an estimated 43,968 contracts traded on Tuesday, which compares with Monday when 48,126 contracts traded. Spreading accounted for 24,788 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, as relatively favourable conditions weighed on values.

Soybean condition ratings in the United States held steady at 65 per cent good to excellent in the latest weekly U.S. Department of Agriculture report, surprising the trade as recent dryness had average analyst guesses calling for a two-point drop on the week.

Chart-based selling contributed to the declines, as the November contract fell back below the psychological US$10.00 per bushel level.

However, dryness concerns in South America remained supportive, with a lack of moisture in Brazil thought to be hampering seeding of the country’s next soybean crop.

CORN was pulled lower by soybeans. The U.S. corn crop was rated 64 per cent good to excellent in the latest weekly report, which was down one point but in line with trade expectations.

The U.S. corn harvest was five per cent done, which was slightly ahead of the three per cent average for this time of year.

Early anecdotal yield reports are pointing to a large U.S. corn crop. The USDA releases it updated supply/demand estimates on Thursday, and pre-report positioning was a feature as traders expect confirmation of larger soybean and corn crops.

WHEAT was stronger on Tuesday, with the largest gains in Kansas City hard red winter wheat.

The U.S. spring wheat harvest was 85 per cent complete as of this past Sunday – two points ahead of average for this time of year.

The country’s next winter wheat crop was six per cent seeded, which was in line with the five-year average

The European Union reported soft wheat exports during the marketing year to date of 4.8 million tonnes, well off the 6.25 million tonnes moved last year at the same time.