By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, November 10 – THE ICE Futures Canada canola market dropped sharply Tuesday, as a bearish USDA report pushed canola below its recent range.
Canola followed the US soy complex lower after the USDA pegged US production and inventory of soybeans at a higher level than analysts had been expecting. Additional selling was triggered after canola broke below key support levels on the charts, according to an analyst.
Speculators liquidated long positions which also weighed on the market, a trader said.
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However, Malaysian palm oil and European rapeseed futures were stronger while steady Chinese buying continued to help prop up the canola market.
Weather problems in South America continue to hamper development of some soybean crops which was also bullish for
canola.
Traders attempted to position themselves somewhat with the Remembrance Day holiday on Wednesday. US markets will remain open while Canadian ones are closed.
Milling wheat, barley and durum were all untraded.
A total of 27,913 canola contracts were traded on Tuesday, which compares with Monday when 14,508 contracts changed hands. Spreading accounted for 14,698 of the contracts traded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade closed seven and a half cents per bushel to almost 12 cents per bushel weaker Tuesday as the United States Department of Agriculture (USDA) released its monthly supply and demand report.
The USDA increased its production and inventory projections for soybeans, which was especially bearish as many analysts had anticipated the government would hold levels steady.
The USDA expects domestic soybean inventories will total 465 million bushels next August.
SOYOIL prices settled weaker on Tuesday.
SOYMEAL closed lower on Tuesday following nearby grain and oilseed markets.
CORN futures closed four to eight cents per bushel weaker on Tuesday, also weighed down by the USDA report.
Corn production is forecasted at 99 million bushels higher, with the national average yield raised 1.3 bushels per acre to 169.3 bushels, the USDA said.
However, limited farmer selling capped some losses in far contracts.
WHEAT closed eight to 11 cents per bushel lower on Tuesday as the USDA raised their estimates for ending stocks and forecasted weak exports.
The USDA expects ending stocks to hit 911 million bushels, which is higher than previous estimates.
That puts ending stocks at their highest level since the 2009/10 crop year, according to the USDA.
Further adding to the bearish tone, US wheat export forecasts have been lowered by 50 million bushels to 800 million bushels.
That level hasn’t been seen since the 1971/72 crop year, the USDA said.
– US winter wheat plantings were reported at 92 per cent complete, analysts say.
– Egypt is tendering for optional origin wheat.
