North American Grain/Oilseed Review: Long liquidation weighs on canola

WINNIPEG, Feb. 10 (MarketsFarm) – The ICE Futures canola market was weaker on Wednesday, falling off of its nearby highs as a downturn in the Chicago Board of Trade soy complex weighed on prices.

Speculative long liquidation was a feature, as fund traders booked profits amid a lack of fresh bullish news, according to a broker

However, the underlying fundamentals for canola remain supportive, and prices settled well off their lows for the day with concerns over tightening supplies making any losses a buying opportunity for end users.

Cold temperatures across much of the Prairies also provided some support.

About 21,376 canola contracts traded on Wednesday, which compares with Tuesday when 31,277 contracts changed hands. Spreading accounted for 11,954 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were down sharply on Wednesday, as a lack of fresh bullish news saw speculative long liquidation come forward to weigh on prices.

Tuesday’s updated supply/demand estimates from the United States Department of Agriculture were largely seen as neutral for the soy market, with projected ending stocks at 120 million bushels in line with expectations.

However, the government agency left its forecasts for South American production unchanged, despite adverse growing conditions and harvest delays in parts of Brazil.

An end to a truckers strike in Argentina was also bearish for soybeans.

CORN was also caught up in speculative long liquidation, seeing follow-through selling after Tuesday’s bearish reaction to USDA supply/demand estimates.

The monthly report was disappointing for bullish corn traders, with projected ending stocks of 1.5 billion bushels coming in well above average trade guesses despite their small downward revision.

The USDA announced a cancellation of 132,000 tonnes of previously reported corn exports this morning, raising concerns over further cancellations after the market had been supported by strong purchases in recent weeks.

WHEAT futures were also caught up in the broad selling pressure, moving down in sympathy with corn and soybeans.

Winter wheat conditions across the U.S. Plains were being followed closely, with the recent cold snap raising concerns over possible winterkill in some areas.

The Western Producer

Tags: canola, North American Grain and Oilseed Review