Canola and Feed Grain Futures Expected to Start Weak on Thursday

The Winnipeg Commodity Exchange is expected to see steady to slightly weaker trade in canola and feed grain futures on Thursday, with anticipated declines in CBOT soybean and grain futures contributing to the price weakness. Traders are warning that canola may be oversold and due for an upward technical correction, but technical signals continue to point downwards, indicating a bearish trend. Meanwhile, underlying support in canola is expected from the absence of significant farmer deliveries and lingering talk of export business at lower price levels.

Key Takeaways:

• Canola and feed grain futures are expected to start Thursday's session on a steady to slightly weaker note.
• Anticipated declines in CBOT soybean and grain futures are seen generating price weakness.
• Canola futures are being called steady to down C$1.00 per metric ton due to weaker calls for CBOT soybean and soyoil values.
• The mostly lower close in Malaysian palm oil futures overnight is expected to add to bearish sentiment in the canola pit.
• Technically, all signals for canola continue to point downwards, indicating a bearish trend.
• Traders warn that canola may be oversold and due for an upward technical correction.
• Lingering talk of export business being conducted at lower price levels may also help to generate some minor support in canola.
• The absence of significant farmer deliveries due to producers' dissatisfaction with cash prices from elevator companies may also provide underlying support.
• The Canadian dollar's slightly lower level in early Thursday activity is also seen as a minor supportive influence for canola.
• Feed wheat and western barley futures are expected to open steady to down as much as C$1.00.
• The move by CBOT corn futures to new contract lows in overnight activity is seen as bearish for WCE feed grain values.
• Additional weakness in the feed complex is anticipated from continued talk that a higher percentage of Western Canada's grain crop will grade as feed than first anticipated.

Statistics:

• C$1.00 per metric ton: expected decline in canola futures due to weaker calls for CBOT soybean and soyoil values.
• C$1.00: possible decline in feed wheat and western barley futures.
• 100%: expected percentage of Western Canada's grain crop that will grade as feed, according to traders.

Sources:

• Resource News International
• COMTEX