By Phil Franz-Warkentin, Commodity News Service
Winnipeg, Jan. 4 – ICE Futures Canada canola contracts were weaker on Monday, as sharp losses in Chinese equities triggered a sell-off in many other markets.
The resulting losses in CBOT soybeans and soyoil contributed to spillover selling pressure in canola, according to participants.
The large supply situation in Western Canada remained another bearish influence, although exporters and domestic crushers continued to show solid demand on a scale-down basis.
Weakness in the Canadian dollar, which was down by roughly half a cent relative to its US counterpart, helped underpin the canola market as well.
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About 14,986 canola contracts were traded on Monday, which compares with Thursday when 7,046 contracts changed hands. Markets were closed Friday for New Year’s Day. Spreading accounted for about 4,608 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded, although prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade were down by six to 10 cents per bushel on Monday, as losses in outside equity markets spilled into the commodities.
Soft manufacturing data out of China trigged a sell-off in that country’s stock markets that spilled into agricultural commodities, as China is a major buyer.
Forecasts calling for some better rainfall in the dry areas of Brazil over the next week added to the softer tone.
Expectations for increased export competition out of Argentina were also bearish, according to participants.
SOYOIL settled lower on Monday, as Chinese economic uncertainty and losses in crude oil weighed on prices.
SOYMEAL futures were down on Monday, following soybeans.
CORN futures in Chicago were down by five to seven cents per bushel on Monday.
In addition to the concerns over the Chinese economic slowdown, corn was also pressured by a downturn in crude oil. Oil had started the day on a firmer footing, but eventually turned lower as well; weighing on the ethanol-linked grain.
Improving moisture conditions in Brazil put some further pressure on values.
WHEAT futures in Chicago were down by 10 to 12 cents per bushel on Monday, with speculative selling a feature.
Poor export demand was another bearish influence on the US futures, especially as Argentina is reportedly moving more wheat onto the global export market at reduced prices.
Improving moisture conditions in some winter wheat growing regions of the world were also bearish. However, concerns over cold temperatures and possible winterkill in parts of Russia and Ukraine did provide some support.
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