Winnipeg Commodity Exchange Sees Declines in Grain and Oilseed Futures

The Winnipeg Commodity Exchange experienced a downtrend in grain and oilseed futures on Monday, as an active harvest pace and favorable weather forecast contributed to lower prices. The market saw losses in moderate trade, with canola futures posting declines. Traders pointed to the firm Canadian dollar and sluggish fresh demand as contributing factors to the price slide. Despite some support from the strength in Chicago Board of Trade soy complex futures and short covering by commercial and commission houses, the market's decline persisted.

Key Takeaways:

• The active harvest pace and increased farmer selling led to a decline in grain and oilseed futures prices.
• Canola futures posted losses in moderate trade, with the market dropping to fresh contract lows.
• The firm Canadian dollar and sluggish fresh demand contributed to the price slide.
• Ideas that the market is severely oversold provided some support, but were not enough to reverse the decline.
• Commercial and commission house short covering met selling from cash dealers and speculators, contributing to the price decline.
• RBC Investments was a buyer, while Fimat and Refco were sellers, with commodity funds largely absent from the market.
• Harvesting conditions have been good, but farmer selling has been light, with much of the activity in the Oct/Dec spread at $3.50.

Statistics:

• The Nov/Jan spread traded at C$5.50, and the Nov04/Nov05 spread traded at $7.00.
• The market dropped to fresh contract lows, with the declines attributed to the active harvest pace and favorable harvest weather forecast.
• The firm Canadian dollar and sluggish fresh demand contributed to the price slide, with the market ignoring the firm tone in CBOT corn.
• Feed grains were mainly lower, with fresh contract lows set in today's trade.
• The Oct/Dec spread traded at $3.50, with hiking conditions balanced off by the cash market tightness.
• Commodity funds were largely absent, waiting for a corrective bounce higher before adding to their short positions.

Sources:

• Resource News International via COMTEX, September 27, 2004.