By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 24 (CNS Canada) – ICE Futures Canada canola contracts were down sharply on Monday, hitting their lowest levels in three weeks.
Fund long liquidation and other speculative selling built on itself, as some stops were hit on the way down and the November contract fell below the psychological C$500 per tonne level.
Meanwhile, the Canadian dollar headed the opposite direction, touching 80 US cents. The strengthening currency cuts into crush margins and makes exports less attractive to international buyers.
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Losses in the Chicago Board of Trade soy complex and improving North American crop weather added to the declines in canola, according to participants.
However, enough areas of concern remain in Western Canada to provide some underlying support. Tight old crop supplies also helped limit the losses.
About 18,785 canola contracts traded on Monday, which compares with Friday when 15,461 contracts changed hands. Spreading accounted for 3,604 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down 10 to 12 cents per bushel on Monday, as improving crop weather weighed on values.
Favourable rains in parts of the Midwest over the weekend, together with forecasts calling for cooler temperatures heading into August, should help the developing crops and were seen as alleviating the weather concerns that had propped up the market recently.
However, condition ratings are still expected to be down slightly in the latest weekly report due out after the close.
SOYOIL futures were lower on Monday.
SOYMEAL futures settled lower on Monday.
CORN futures in Chicago were down one to three cents per bushel on Monday, also reacting to weekend rainfall.
Beneficial rains hit a large portion of the US Corn Belt over the weekend, accounting for some of the selling pressure.
Bearish technical signals added to the declines, while losses in wheat also spilled over to weigh on prices.
However, solid export demand and rising crude oil prices provided some underlying support. The USDA reported a fresh sale of 135,000 tonnes of US corn to ‘unknown destinations’ this morning.
WHEAT futures in Chicago were down by three to 10 cents per bushel, while Minneapolis spring wheat was down by as much as 15 cents.
At least a third of the drought-stricken US spring wheat belt saw some rain over the weekend, which triggered some selling pressure in the Minneapolis market today. That selling spilled into the Chicago and Kansas City contracts as well.
The advancing winter wheat harvest was also bearish for all three wheat contracts.
However, crop conditions remain poor for spring wheat overall and expectations for another decline in the weekly crop rating helped limit the losses.
