By Phil Franz-Warkentin, MarketsFarm
Winnipeg, May 1 (MarketsFarm) – ICE Futures canola contracts continued their downward slide of the past week on Wednesday, as speculators remained on the sell side adding to their large short positions.
In addition to the bearish chart signals, losses in Chicago Board of Trade soyoil, large old crop supplies, and the ongoing trade tensions between Canada and China also weighed on values.
A lack of significant end-user demand on the other side contributed to the declines, as commercial traders remained content to watch prices fall.
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The Canadian government announced expansions to the Advance Payments Program on Wednesday in an effort to help canola farmers amid the Chinese trade uncertainty. Trade missions to work on diversifying the demand for canola were also announced. However, the government announcements did little to address the root problem.
The Canadian dollar was slightly softer, providing some support for canola. Oversold price sentiment and expectations for reduced acres this spring also helped temper the declines.
About 21,572 canola contracts traded on Wednesday, which compares with Tuesday when 11,238 contracts changed hands. Spreading accounted for 13,262 of the contracts trade.
SOYBEAN futures at the Chicago Board of Trade touched fresh contract lows in many months on Wednesday before uncovering some chart support to settle with only small losses.
Bearish technical signals accounted for much of the weakness, as speculators continued to add to their large net short positions.
The lack of progress on trade talks between the United States and China also weighed on prices, as those negotiations continue to drag on despite some optimistic rumblings.
South American harvest pressure and expectations that seeding delays in the U.S. will see some intended corn area switch into soybeans instead added to the softer tone.
CORN futures were higher, finding some spillover support for wheat.
Corn seeding is running well behind normal across the Midwest, with cool and wet weather in the forecasts expected to cause more delays.
WHEAT futures were higher, correcting off of nearby lows as end user bargain hunting and speculative short-covering came forward to provide support.
Seeding delays for spring wheat in the northern states also underpinned the futures.
However, relatively favourable crop conditions for winter wheat tempered the upside, with early yield estimates looking significantly above the year ago level.
