Winnipeg Commodity Exchange Grain and Oilseed Futures Drop Amid Soaring Temperatures and Sluggish Demand

Strategic Insights -

Grain and oilseed futures at the Winnipeg Commodity Exchange took a hit on June 28, 2004, as canola prices were pressured lower by steep declines in Chicago Board of Trade soy complex futures and favourable growing conditions forecast for western Canada. Traders estimated that 1,000 to 2,000 commodity funds had short positions in July canola, while market observers noted that commercial buying met mainly speculative selling, with Cargill and Agricore United as notable buyers and Refco as a featured seller.

Key Takeaways:

  • Canola prices were pressured lower by steep declines in CBOT soy complex futures and favourable growing conditions forecast for western Canada.
  • Approximately 1,000 to 2,000 commodity funds had short positions in July canola, according to trader estimates.
  • Commercial buying met mainly speculative selling, with Cargill and Agricore United as notable buyers and Refco as a featured seller.
  • Feed grain futures posted moderate losses in light trade, with commercials as the featured traders.
  • July barley was supported by the fact that cash markets were trading at a premium to the July futures.
  • Much of the volume in July canola traded came from intermonth spreading, with the July/Nov spread trading from C$18.00 to $20.00.

Statistics:

  • 1,000 to 2,000 contracts short in July canola, basis the July contract (estimated by traders)
  • 5,000 contracts rolled over into the Nov contract (according to traders)
  • C$18.00 to $20.00 range for the July/Nov spread
  • Commodity funds rolled their positions from July into Nov
  • Canola prices pressured lower by favourable growing conditions forecast for western Canada
  • Sluggish fresh demand and the firm Canadian dollar contributed to the soft tone

Sources:

  • Resource News International via COMTEX
  • Chicago Board of Trade (CBOT)
  • USDA
  • Statistics Canada
  • Winnipeg Commodity Exchange (WCE)