Canola Futures Decline Amid Steady Elevator Company Hedge Offers

Strategic Insights -

Canola futures at the Winnipeg Commodity Exchange (WCE) traded mainly lower levels at midsession in generally choppy activity, influenced by steady elevator company hedge offers and losses posted by CBOT soybean complex values. The declines in CBOT soybean and soyoil futures were the key undermining price influences, traders said. Steady elevator company hedge selling contributed to the declines posted in canola, and beneficial precipitation in the soybean growing regions of South America this week added to the bearish price tone. However, light commodity fund buying and steady demand from exporters and domestic crushers at the lows offset some of the declines.

Key Takeaways:

  • Canola futures traded mainly lower levels at midsession in choppy activity, influenced by steady elevator company hedge offers and losses posted by CBOT soybean complex values.
  • The declines in CBOT soybean and soyoil futures were the key undermining price influences, with steady elevator company hedge selling contributing to the declines in canola.
  • Beneficial precipitation in the soybean growing regions of South America this week added to the bearish price tone in canola.
  • The burdensome canola supply situation in Western Canada remained an undermining price influence, with traders citing adequate supplies and weakness in CBOT grain futures as tempering the upward momentum in prices.
  • Light commodity fund buying and steady demand from exporters and domestic crushers at the lows helped to offset some of the declines in canola.
  • Much of the exporter interest was said to be covering old business with Japan, and not necessarily new sales, exporters said.
  • A minor pull-back in the value of the Canadian dollar against other foreign currencies also helped to trim the downward movement seen in canola.

Statistics:

  • At midsession, an estimated 3,119 canola contracts had changed hands.
  • Feed wheat futures were steady to fractionally higher in quiet midmorning activity.
  • Light commercial buying in the absence of willing sellers resulted in a few contracts being propped up, with 15 feed wheat contracts having changed hands at midsession.
  • Western barley futures were steady to fractionally weaker in quiet midmorning trade, with 5 contracts having traded at midsession.

Sources:

  • Resource News International via COMTEX
  • Winnipeg Commodity Exchange (WCE)
  • CBOT (Chicago Board of Trade)
  • Federal Reserve Economic Data (FRED)
  • Bureau of Labor Statistics (BLS)
  • United States Department of Agriculture (USDA)
  • Winnipeg Commodity Exchange Journal