By Dave Sims and Phil Franz-Warkentin
Winnipeg, March 4 – THE ICE Futures Canada canola market finished sharply weaker on Wednesday, as losses in the US soy complex and a bearish technical position triggered a wave of selling.
The stronger Canadian dollar also pressured canola prices as it made canola less attractive to out-of-country buyers.
Losses in Malaysian palm oil were also bearish for values.
The May contract tested the technically-important C$455.00 a tonne level, said a trader, adding some farmers would think twice about planting canola going forward if values sink below the C$450.00 a tonne level.
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However, spring road bans throughout the Prairies will likely keep some producers from making deliveries.
Around 18,266 canola contracts were traded on Wednesday, which compares with Tuesday when around 18,630 contracts changed hands.
Spreading accounted for 8,774 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade posted large losses on Wednesday, moving 14 to 19 cents per bushel lower as declining concerns over South American labour disputes weighed on values.
The trucker strike in Brazil is already moving towards resolution, and soybeans are once again moving to export positions, according to participants. Meanwhile, talk of a three-day strike by farmers in Argentina protesting their government was largely downplayed as the action is unlikely to cause any serious disruptions.
Chart-based selling contributed to the declines, as the May contract moved below the psychological US$10 per bushel level tested nearby support points.
SOYOIL futures were down on Wednesday.
SOYMEAL futures moved lower on Wednesday, following soybeans.
CORN futures in Chicago were down by one to three cents per bushel on Wednesday, taking some direction from the losses in soybeans and wheat. The strengthening US dollar was also bearish for prices.
However, corn lagged the other commodities to the downside as good nearby demand provided some support.
A report from the US Energy Information Administration showing declining US ethanol stocks helped limit the losses in corn, said traders.
WHEAT futures in Chicago finished four to fifteen cents per bushel lower on Wednesday, with the strengthening US dollar index making US wheat more expensive for international buyers. Minneapolis wheat futures were down four to five cents, while Kansas City contracts were down by seven to eight cents.
The dollar index, which compares the US dollar to a number of international currencies, was trading its strongest levels since 2003 on Wednesday.
Large global wheat supplies and relatively favourable US winter wheat conditions added to the softer tone.
Bearish technicals were also a factor, with the May wheat contract in Chicago falling below the US$5 per bushel level.
– Farmers in the United Kingdom seeded 1.69 million hectares of wheat last fall, which was down 7.2% from the previous year, according to a report from the region.
– Ukraine has exported 24.7 million tonnes of grain during the crop year to date, with wheat accounting for 9.3 million tonnes of the total, according to a report from the country’s agriculture ministry.
