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Commodity futures

Winnipeg Commodity Exchange Canola Futures Finish Lower on Weak CBOT Soy Complex

Strategic Insights

— 1 min read

Canola futures at the Winnipeg Commodity Exchange (WCE) closed lower on Wednesday due to the weak tone in Chicago Board of Trade soy complex futures, according to brokers. Despite modest declines in CBOT futures, canola held up well, with export pricing and a firmer tone in the market contributing to its stability. Farmer selling was slow as farmers prepared for planting, while grain companies avoided the futures market, pricing sales directly against export sales and adding to the upward bias in the market.

Key Takeaways:

  • Canola futures at the WCE finished lower on Wednesday due to weak CBOT soy complex futures.
  • Canola posted small declines, but held up well compared to CBOT futures, trade sources said.
  • Export pricing and a firmer tone in the market contributed to canola's stability, as Japanese exporters booked additional shipments ahead of the Golden Week holiday.
  • The weak Canadian dollar, approaching the US$0.80 level, was helping to stimulate demand, trade sources added.
  • Farmer selling was slow as farmers prepared for planting, which contributed to support in the market.
  • Grain companies avoided the futures market, pricing sales directly against export sales and adding to the upward bias in the market.
  • Technical traders pointed to a building pennant formation on the canola charts as a factor helping to hold the market in its recent trading range.
  • Commercials dominated activity, with commercials buying on a scale down and offerings felt to be liquidation selling.
  • Feed grains posted losses in light trade, with declines in CBOT grains weighing on values and lack of strong feed lot demand contributing to weakness.
  • Western barley edged lower in light commercial trade, with losses limited by a fairly firm tone in cash markets.

Statistics:

  • 2,716 contracts were involved in spreads.
  • 4,318 contracts were estimated to trade, up from Tuesday's 3,900 contracts.
  • The estimated volume of 4,318 contracts was higher than the previous day's total.
  • The weak Canadian dollar was approaching the US$0.80 level.
  • Japanese exporters booked additional shipments ahead of the Golden Week holiday.
  • Farmer selling was slow due to preparation for planting.
  • Grain companies avoided the futures market, pricing sales directly against export sales.

Sources:

  • Resource News International via COMTEX
  • Winnipeg Commodity Exchange (WCE)
  • Chicago Board of Trade (CBOT)
  • COMTEX (http://www.comtexnews.com)

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