By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Feb. 24 (MarketsFarm) – The ICE Futures canola market was down sharply on Monday, settling just above contract lows as concerns over the COVID-19 coronavirus led to widespread selling in the global equity and commodity markets.
There are now nearly 80,000 confirmed cases of the coronavirus worldwide, with about 2,600 reported deaths, according to World Health Organization data. Reports of increased infection rates outside of China has investors spooked over the possibility of a global pandemic, with those concerns causing the Dow Jones Industrial average to drop by more than 900 points.
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Speculators were already holding large net short positions in canola, and the underlying bearish sentiment kept them on the sell side to start the week.
Meanwhile, end users were only buying on a scale-down basis as they wait to see how low prices will go.
Canola traders were also keeping an eye on pipeline protests across Canada, with police moving in to shut down a blockade on the CN Rail line in Ontario today.
A weaker tone in the Canadian dollar provided some underlying support.
About 31,941 canola contracts traded on Monday, which compares with Friday when 27,519 contracts changed hands. Spreading accounted for 23,114 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were down sharply on Monday, amid a general sell-off in the global commodity markets.
Fears that the COVID-19 coronavirus outbreak will not be able to be contained, as infection rates rise outside of China, triggered the selloff that weighed on all of the grains and oilseeds.
The advancing Brazilian harvest added to the softer tone in beans, although the harvest was running behind the year ago pace.
Weekly United States soybean export shipments of nearly 600,000 tonnes were down from the previous week, and well off what moved during the same week a year ago. However, the U.S. Department of Agriculture did report a private sale of 163,000 tonnes to Mexico this morning.
CORN was also caught up in the virus fears and posted losses on Monday.
Weekly U.S. corn export shipments of about 910,000 tonnes were up on both the week and compared to the year ago, which helped temper the declines.
WHEAT futures were also pressured lower by the broad-based virus fears.
Weekly U.S. wheat export inspections of about 410,000 tonnes were down from the previous week. However, year-to-date U.S. wheat exports were running well ahead of the year-ago pace.
