North American Grain/Oilseed Review: Canola posts limit-down losses

The ICE Futures canola market was down sharply on Thursday, falling by their daily C$30 per tonne limit in many months as a selloff in the Chicago Board of Trade soy complex had investors liquidating long positions on both sides of the border.

Speculators were noted sellers, with the underlying fundamentals still relatively supportive for canola.

While recent rains have helped improve soil moisture conditions somewhat and temperatures have moderated across the Prairies, more precipitation will be needed through the growing season.

Sharp losses in the Canadian dollar, which dipped below 81 U.S. cent, should have also provided some support.

About 17,590 canola contracts traded on Thursday, which compares with Wednesday when 18,231 contracts changed hands. Spreading accounted for 5,740 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were down sharply on Thursday as the daily limits were expanded after Wednesday’s declines. Broad strength in the United States dollar internationally was bearish for the grains and oilseeds, as the rising currency makes exports more expensive for global buyers. Fund selling was a feature in all of the agricultural commodities, with investors liquidating long positions a feature.

Shifting Midwestern weather forecasts calling for rain and milder temperatures over the weekend were another bearish influence, helping ease concerns over recent hot and dry conditions.

Uncertainty over possible changes to U.S. biofuels policy, which could see the country lower its renewable fuel blending requirements in an effort to support oil refineries, was especially bearish for soyoil which was down its expanded daily limit of 5.5 cents per pound.

Weekly U.S. soybean export sales came in below expectations, with 65,000 tonnes of old crop business and only 6,500 tonnes for new crop.

CORN was down sharply, with the rains in the Midwestern forecasts and the possible adjustments to U.S. biofuels policy behind much of the selling pressure.

Weekly U.S. corn export sales were in line with expectations, at about 18,000 tonnes for old crop movement and 276,100 tonnes for new crop.

WHEAT futures were down across the board, caught up in the general selling pressure brought on by the strengthening U.S. dollar.

Dryness concerns in the U.S. spring wheat growing regions helped temper the losses somewhat in Minneapolis.

Weekly U.S. wheat export sales were in line with expectations, with 287,000 tonnes sold during the week.

The Western Producer

Tags: corn, soybeans, US, corn export, caola