By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Nov. 16 (CNS Canada) – ICE Futures Canada canola contracts posted small losses on Thursday, taking back some of Wednesday’s sharp gains as a downturn in the Chicago Board of Trade soy complex weighed on values.
A firmer tone in the Canadian dollar also cut into crush margins, adding to the softer tone.
Increased farmer hedges, brought on by Wednesday’s rally, also weighed on values, according to participants.
However, solid end user demand underneath the market remained supportive. Expectations for increased North American demand for canola oil, if the U.S. diverts more soyoil to biodiesel production, also helped temper the declines.
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About 16,078 canola contracts traded on Thursday, which compares with Wednesday when 20,572 contracts changed hands. Spreading accounted for 9,142 of the contracts traded.
Soybean futures at the Chicago Board of Trade corrected lower on Thursday, as soft weekly export sales weighed on prices.
The USDA reported weekly US soybean export sales of about 1.1 million tonnes, which came in at the low end of trade expectations.
Relatively favourable weather reports out of South America and bearish technical signals also weighed on values.
However, tightening soyoil supplies and expectations for increased demand from the domestic biodiesel sector did provide some underlying support.
Corn prices touched fresh contract lows on Thursday, losing ground as weekly export sales came in below trade guesses at about 950,000 tonnes.
The large US crop, currently in its final stages of harvest, and the good South American production prospects also weighed on prices.
However, ideas that the losses were looking overdone helped temper the declines.
Wheat futures were steady to higher on the day, seeing a bit of a correction following yesterday’s losses.
In addition to the speculative short-covering, wheat also found some strength from expectations for lower European winter wheat plantings this year.
Weekly US wheat export sales of about 490,000 tonnes were at the top end of expectations.
