Winnipeg Commodity Exchange: Canola and Feed Grain Futures Muted

Strategic Insights -

The Winnipeg Commodity Exchange (WCE) saw mixed activity in canola and feed grain futures, with western barley futures showing a firmer tone while feed wheat and canola futures experienced losses. Beneficial harvest weather over the weekend in western Canada and strength in the Canadian dollar contributed to the volatility in the market. Buyers were hesitant to make significant purchases, awaiting confirmation on the size and quality of the Canadian canola crop.

Key Takeaways:

  • Canola futures were steady to mixed at midday, with hedge selling pushing prices to new contract lows early in the day.
  • Buyers have stepped back, waiting for more confirmation on the Canadian canola crop, which is believed to be a major factor in the recent weakness in the canola pit.
  • Continued strength in the Canadian dollar is seen as bearish for Winnipeg futures.
  • Malaysian palm oil futures closed lower overnight, but canola futures were firmer in the actively traded front months at midday.
  • Technical support in the Nov contract was holding at C$300 after the market tested the level earlier in the day.
  • Flaxseed futures were steady to slightly lower in light commercial activity.
  • Western barley futures were up at midday in two-sided commercial activity, with gains in CBOT corn futures helping underpin the Winnipeg futures.
  • Expectations for large feed wheat supplies this year continue to weigh on the market.

Statistics:

  • Canola futures were at new contract lows early in the day.
  • Hedge selling was seen on the sell side of the quiet trade, with RBC Investments and Louis Dreyfus involved.
  • Buyers have stepped to the sidelines, awaiting confirmation on the size and quality of the Canadian canola crop.
  • The Canadian dollar's strength is seen as bearish for Winnipeg futures.
  • Malaysian palm oil futures closed lower overnight.
  • CBOT soy complex strength helped support canola values.
  • Overnight sales of 2,000 metric tons of Canadian canola to Japan on the spot cash market were confirmed.
  • Support in the Nov contract was holding at C$300.
  • Flaxseed futures were steady to slightly lower at midsession.

Sources:

  • Resource News International via COMTEX
  • Phil Franz-Warkentin, Resource News International
  • http://www.comtexnews.com