Winnipeg Commodity Exchange Grain and Oilseed Futures Trade Lower in November 2004

Strategic Insights -

Grain and oilseed futures at the Winnipeg Commodity Exchange (WCE) saw significant declines in November 2004, primarily influenced by the weaker tone in CBOT soy and grain futures. Western barley and feed wheat futures hit new contract lows, while canola values dropped in sympathy with the heavy losses in the CBOT soy complex. Local and commission house speculative selling, along with an increase in farmer hedges, contributed to the market's weakness.

Key Takeaways:

  • Grain and oilseed futures at the WCE were lower at midsession, with downward pressure from the weaker tone in CBOT soy and grain futures.
  • Western barley and feed wheat futures both tested new contract lows during the early activity.
  • Canola values were lower at midday, dropping in sympathy with the heavy losses in the CBOT soy complex.
  • Local and commission house speculative selling, along with an increase in farmer hedges, were notable features of the market's weakness.
  • Commercial selling in the new crop Nov contract added to the early weakness, but commercial demand picked up as the market moved lower, limiting the declines.
  • Fimat Canada was a scale-down buyer, while Cargill Ltd. was seen on the buy side.
  • Overnight gains in Malaysian palm oil futures and a weaker tone in the Canadian dollar provided support to the canola market.
  • The Nov/Jan canola spread narrowed from C$4.90 under to C$4.30 under as participants continued to clean out the remaining open interest in the nearby month.

Statistics:

  • 120 lots were delivered against the Nov canola contract.
  • The Dec/Mar barley spread traded at C$4.00 under.
  • The Mar/May barley spread moved at C$3.00 under.
  • Feed wheat values were sharply lower in light trade.

Sources:

  • Resource News International
  • COMTEX (http://www.comtexnews.com)