By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Oct. 26 – THE ICE Futures Canada canola market finished weaker Monday, following losses in the US soy complex and feeling the weight of the Canadian currency.
The nearby November contract plunged through its previous support level of C$470 per tonne early on in the session. The January contract had also held a range above C$480 per tonne in the last few days before today’s sudden drop.
The Canadian dollar was stronger relative to its US counterpart, which made canola less attractive to foreign buyers.
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Losses in the vegetable oil market pressured prices.
Many analysts feel there is more canola out there than previously forecast which helped to undermine the market.
However, steady demand, especially from China, limited the losses, said a trader.
“The Chinese are there and are going to take volume but they’re not prepared to chase a rally,” he explained, noting recent buying action from China seemed to be triggered once contracts entered into the C$460 per tonne range.
Milling wheat, barley and durum were all untraded.
A total of 41,085 canola contracts were traded on Monday, which compares with Friday when 36,427 contracts changed hands. Spreading accounted for 26,396 of the contracts traded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were down 10 to 11 cents per bushel on Monday, as the advancing US harvest weighed on values.
Weather conditions across the Midwest remained favourable for harvest operations over the weekend, and industry participants expect the USDA to show the progress at about 90% complete.
Spreading between soybeans and the grains contributed to the losses, as traders were said to be selling soybeans while they bought corn and wheat.
SOYOIL settled lower on Monday, as losses in Malaysian palm oil spilled over to weigh on the market.
SOYMEAL futures were down on Monday, following soybeans.
CORN futures in Chicago were up 4 to 5 cents per bushel on Monday, as a rally in wheat spilled over to provide support.
The US corn harvest is thought to be about 75 per cent complete, with yield reports generally beating earlier expectations.
WHEAT futures in Chicago were up by 17 to 18 cents per bushel on Monday, as concerns over a lack of moisture in the US Southern Plains winter wheat growing region provided support. Flooding issues in other winter wheat growing regions were also reported. Weather concerns in other wheat growing regions of the world, including Australia and the Black Sea region also remained supportive.
Chart-based buying contributed to the gains, with some stops hit on the way up.
However, US wheat remains expensive internationally, and the lack of significant export demand did keep a lid on the rally, according to participants.
