Winnipeg Commodity Exchange Sees Decline in Grain and Oilseed Futures

Strategic Insights -

The Winnipeg Commodity Exchange experienced a downturn in grain and oilseed futures on Tuesday, with contract lows set in canola and feed grains. Moderate activity was reported, with hedge selling accelerating in these markets. Canola futures saw a range of trade in the Mar-May spread, from C$1.00 to $2.00, with most activity centered around $2.00. The market saw initial losses due to heavy hedge selling, followed by a slight pullback attributed to crusher buying. A weak Canadian dollar and a firm Chicago Board of Trade soy complex provided limited support to the market.

Key Takeaways:

  • Canola futures declined to fresh contract lows, with a range of C$1.00 to $2.00 in the Mar-May spread, and most trade occurring around $2.00.
  • The market saw initial losses due to heavy hedge selling, followed by a slight pullback attributed to crusher buying.
  • The weak Canadian dollar and firm Chicago Board of Trade soy complex provided limited support to the market.
  • Agricore United's premium on canola deliveries in Alberta attracted farmer selling, contributing to market decline.
  • The EU's higher-priced canola supplies, priced C$40 to $50 per metric ton above Canadian supplies, provided export opportunities for Canadian canola.
  • Feed grain futures declined to fresh contract lows, with moderate trade in barley and light trade in feed wheat.
  • Western barley futures dropped modestly to fresh lows, with increased country selling pressuring prices down.
  • An estimated 6,934 contracts of canola traded, down from 5,572 contracts on Monday.

Statistics:

  • 6,934 contracts of canola traded, down from 5,572 contracts on Monday.
  • An estimated 252 contracts of feed wheat were traded, down from 452 contracts traded on Monday.
  • Weather conditions, reducing livestock feed demand, were a bearish factor in the market.
  • Western barley futures dropped modestly to fresh lows, with 1,213 contracts changing hands, up from 383 contracts the previous day.

Sources:

  • Resource News International via COMTEX, January 25, 2005
  • COMTEX (http://www.comtexnews.com)