By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Feb. 28 (MarketsFarm) – The ICE Futures canola market dropped to fresh contract lows in the most active contracts on Friday, but managed to settle with only small declines as traders squared positions ahead of the weekend.
Continued weakness in the global financial and energy markets over coronavirus fears remained a bearish influence, according to participants.
However, weakness in the Canadian dollar and ideas that the declines were looking overdone provided some support.
About 18,185 canola contracts traded on Friday, which compares with Thursday when 30,112 contracts changed hands. Spreading accounted for 11,228 of the contracts traded.
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The nearby March contract moved higher in very thin activity, as participants exited the front month ahead of its expiry.
SOYBEAN futures at the Chicago Board of Trade were weaker on Friday, as coronavirus-related selling pressure weighed on prices and speculators added to short positions ahead of the weekend.
The advancing Brazilian harvest added to the softer tone, with cheaper Brazilian beans displacing the United States in the global export market.
The U.S. Department of Agriculture reported private export sales of 135,000 tonnes of soymeal to the Philippines, which helped underpin the meal market and temper the losses in soybeans.
Expectations for increased export tariffs out of Argentina, coupled with a strike by the soybean crushers union in the South American country, also kept meal pointed higher despite the losses elsewhere.
CORN futures were steady, recovering from earlier losses as some support was uncovered to the downside.
Drier weather conditions in Brazil should help with seeding the second corn crop there, although the dryness also raised some concerns over germination.
Worldwide virus fears and rising global production estimates put some pressure on prices, keeping corn in a narrow range.
WHEAT futures were mixed, with losses in Chicago soft wheat and gains in the Minneapolis and Kansas City futures.
The International Grains Council released updated production estimates pegging world wheat production in 2020/21 at a record 769 million tonnes. That compares with the upwardly revised forecast for the current marketing year of 763 million tonnes.
The IGC raised its corn production estimate for 2019/20 by a million tonnes, taking it in line with the USDA’s forecast at 1.112 billion tonnes.
