Winnipeg Commodity Exchange: Canola and Oilseed Futures Slide on Weak CBOT Soy Complex Futures

Winnipeg Commodity Exchange's grain and oilseed futures declined in the wake of losses in Chicago Board of Trade soy complex futures, brokers said. Canola dropped moderately in light activity due to a weak tone in CBOT soy complex values and routine demand. Traders were surprised by the narrowing of the Jan/Mar spread to the C$5.00 level, but had no explanation for the price move. Commercials dominated the activity in feed grain futures, pressuring the market down due to the weak tone in CBOT grains and the large Canadian feed grain supply.

Key Takeaways:

• Canola futures declined due to weak CBOT soy complex values and routine demand, causing traders to sell in the market.
• The Jan/Mar spread narrowed to the C$5.00 level, surprising traders who had no explanation for the price move.
• Commercials dominated the activity in feed grain futures, pressuring the market down due to the weak tone in CBOT grains and the large Canadian feed grain supply.
• An estimated 2,643 contracts changed hands in canola futures by midday, with most of the volume comprising intermonth spreading.
• Rural producers held a bearish view of the market, citing a large visible supply in commercial hands as a bearish feature.
• Analysts estimated commodity funds to hold a short position in January, estimated at 7,000 to 10,000 contracts.
• Routine commercial pricing met selling from commercials and commission houses in the canola market.
• Fundamentals underpinning the market included the idea that canola is oversold and slow country movement as farmer selling has been reduced by the low farm gate price.

Statistics:

• Estimated 2,643 contracts changed hands in canola futures by midday.
• The Jan/Mar spread narrowed to C$5.00 from C$7.00 on Friday.
• Commodity funds held an estimated short position of 7,000 to 10,000 contracts in January.
• Feed grain futures posted losses in light to moderate trade.
• Estimated 302 contracts were traded in western barley by midday.
• Feed wheat volume at midday was estimated at 601 contracts.

Sources:

• (Resource News International via COMTEX)
• (Resource News International)