By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, May 29 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Tuesday, largely ignoring a downturn in the Chicago Board of Trade soy complex.
The losses in soybeans were tied to renewed concerns over the trade dispute between China and the United States, with any issues between those two countries possibly opening the door for more canola business.
Weakness in the Canadian dollar provided some underlying support for canola as well, as the currency fell to its lowest levels in two months.
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While much needed precipitation is in the forecasts for many areas of Western Canada over the next week, there were still enough areas of concern to keep some weather premiums in the market.
However, declines in CBOT soybeans did put some pressure on values. Large supplies overhanging the market and chart resistance to the upside also weighed on prices.
About 22,751 canola contracts traded, which compares with Monday when 6,971 contracts changed hands. Spreading accounted for 14,956 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were lower on Tuesday, as the ongoing trade spat between China and the United States came back to the forefront.
After it was looking like a deal between the two countries may be near last week, today saw the U.S. move forward with plans for placing tariffs on US$50 billion worth of Chinese imports.
The resulting concerns over retaliation weighed on the grains and oilseeds, with a U.S. trade delegation set to visit China later this week.
Continued labour disruptions in Brazil were somewhat supportive, as exports from the country are being curtailed.
In other news, the U.S. Justice Department granted approval of Bayer’s acquisition of Monsanto, but will require Bayer to divest itself of about US$9 billion in assets. BASF will purchase those assets, which include Bayer’s canola and soybean seed businesses, and the Liberty herbicide business.
CORN futures were also lower, following soybeans and wheat.
U.S. farmers were thought to have made good seeding progress over the past week, with crop conditions generally favourable.
However, solid export demand provided some support, helping temper the declines.
WHEAT futures were all lower, as speculators booked profits amid ideas that the market was looking overbought.
Drought conditions in the southern Plains remained supportive, although the yield losses there may be factored into the futures for the time being.
Weather concerns elsewhere in the world, including Russia and Australia, also helped limit the losses.
