By Phil Franz-Warkentin, MarketsFarm
Winnipeg, March 1 (MarketsFarm) – ICE Futures canola contracts ended with sharp losses in the front months after a volatile trading day on Friday.
Concerns over declining Chinese demand sparked a selloff in the old crop contracts, as traders bailed out of long positions or added to their shorts.
With Chinese export demand already slowing down amid heightened political tensions, China is now reportedly getting stricter on issuing GMO certifications for canola oil and meal imports from Canada.
While there was no confirmation if canola seed was also being affected by the stricter certification process, the concerns had everyone in the canola market “running for cover,” according to a trader.
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On the other side, the Canadian dollar was also sharply weaker on the day, which provided some underlying support for canola as crush margins improved.
The Chicago Board of Trade soy complex was also steady on the day, and some of the more deferred new crop canola contracts managed to end higher.
About 49,095 canola contracts traded on Friday, which compares with Thursday when 24,835 contracts changed hands. Spreading accounted for 27,598 of the contracts traded.
SOYBEAN futures traded to both sides of unchanged on Friday, but settled with small gains in the most active months.
Uncertainty over trade relations between the United States and China kept some caution in the bean market ahead of the weekend, with no firm deal expected at least until later this month.
The advancing Brazilian soybean harvest also weighed on values, as cheaper South American beans become more readily available on the global export market.
CORN futures ended firmer, seeing a modest correction after dropping near contract lows in earlier activity.
Heavy deliveries against the March contract on the first notice day were somewhat bearish.
WHEAT futures ended mixed, seeing some consolidation after the Chicago and Kansas City contracts posted large losses throughout the week.
While bearish chart signals and the large global supplies kept some pressure on the wheat market, the futures were said to be due for some consolidation.
Rising estimates on the size of the 2019 Russian wheat crop were somewhat bearish.
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