Winnipeg Commodity Exchange Grain and Oilseed Futures Under Pressure

Strategic Insights -

The Winnipeg Commodity Exchange (WCE) saw a decline in grain and oilseed futures trading on November 19, 2004, with canola futures leading the downward price slide. The upward rebound in the Canadian dollar, combined with increased hedge offers, undermined price influence. The absence of significant fresh export demand contributed to the bearish sentiment, with losses overnight in Malaysian palm oil futures and a drop-off in demand from domestic crushers exacerbating the weakness.

Key Takeaways:

  • Canola futures declined in good volumes of trade, with elevator company hedge offers and declines in CBOT soybean and soyoil values contributing to the downward price momentum.
  • The upward rebound in the Canadian dollar was a significant undermining price influence for canola futures.
  • Western barley and feed wheat futures were steady to lower in very light activity, with weakness in CBOT corn futures sparking downward price action in barley.
  • Light commission house liquidation orders weighed on feed wheat, with spreading of the Jly/Oct contracts at C$5.50 under augmenting the volume total.
  • Dwayne Klassen, a trader, stated that hedge offers along with the declines in CBOT soybean and soyoil values generated much of the downward price momentum.
  • Exporters confirmed that a routine 2,000 to 3,000 metric tons of Canadian canola were sold to Japan on the spot cash market overnight for an unspecified delivery period.
  • Traders reported a drop-off in demand and some hedge offers, adding to the weakness in CBOT corn futures, which sparked some of the downward price action seen in barley.
  • The absence of significant fresh export demand contributed to the bearish sentiment in the commodity market.

Statistics:

  • Canola futures declined by an unspecified amount in good volumes of trade.
  • CBOT soybean and soyoil values declined, contributing to a downward price momentum.
  • Western barley and feed wheat futures traded at 1-2% lower in very light activity.
  • CBOT corn futures declined, sparking some of the downward price action seen in barley.
  • Light commission house liquidation orders weighed on feed wheat, with spreading of the Jly/Oct contracts at C$5.50 under augmenting the volume total.

Sources:

  • Dwayne Klassen, Resource News International
  • Resource News International via COMTEX (http://www.comtexnews.com)
  • Winnipeg Commodity Exchange