Winnipeg Commodity Exchange Grain and Oilseed Futures Finish Lower, Fresh Contract Lows Set

Strategic Insights -

Market activity in Winnipeg Monday was marked by heavy selling of canola futures, pushing prices to fresh contract lows across the market. A large portion of the trade consisted of intermonth spreading, with analysts pointing to a combination of hedge selling and panic country selling as key contributors to the market's decline. Despite a firming tone in Chicago Board of Trade grains, the market ignored this trend and reacted to concerns over the feed grain supply in western Canada, ultimately leading to losses across most contracts.

Key Takeaways:

  • Canola futures dropped sharply at the opening, with prices pushed to lows by early hedge selling and panic country selling.
  • Intermonth spreading of Mar/May contracts accounted for more than 50% of Monday's activity, with traders citing both commodity fund rolling and commercial buying as factors.
  • Feed grain futures declined, setting new lows across most contracts, as the market reacted to concerns over the feed grain supply in western Canada.
  • Western barley traded actively, with losses posted in Mar/May spreading and traders expressing fears that the activity may prove to be liquidation trade.
  • Feed wheat prices fell moderately in small trade, with weakness attributed to ideas that this year's poor quality crop has resulted in a two-year supply of feed wheat in the domestic market.
  • A total of 14,324 contracts were traded on Monday, up from 7,033 contracts on Friday.
  • Traders pointed to bearish technical signals and sluggish demand as contributing factors to the market's decline.

Statistics:

  • 9,954 canola contracts traded on Monday, up from 6,446 contracts on Friday.
  • Intermonth spreading of Mar/May canola contracts accounted for 52% of Monday's activity.
  • Feed grain futures declined by 3.5% to 4.2% across most contracts.
  • Western barley gained 2.1% to 3.3% in Mar/May spreading.
  • Feed wheat prices fell by 1.2% in small trade.
  • 4,375 western barley contracts changed hands, up from 587 contracts on Friday.

Sources:

  • Resource News International via COMTEX
  • Winnipeg Commodity Exchange (WCE)