By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 20 (CNS Canada) – ICE Futures canola contracts continued their downward slide on Wednesday, hitting fresh contract lows for the second-straight session.
Speculators were noted sellers as bearish technical signals kept the bias pointed lower.
Strength in the Canadian dollar, a lack of significant end user demand and steady farmer selling also weighed on values.
However, a turn higher in Chicago Board of Trade soybeans and soyoil provided some underlying support. Short-covering at the lows also provided some support amid ideas canola was starting to look oversold.
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About 36,687 canola contracts traded on Wednesday, which compares with Tuesday when 32,287 contracts changed hands. Spreading accounted for 27,838 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade managed to settle with small gains on Wednesday, recovering from early losses by the close.
Optimism over trade talks underway between the United States and China this week provided some support.
Looking ahead, the U.S. Department of Agriculture will release six weeks of export data on Friday that was backlogged due to the government shutdown. Traders will be looking over the numbers closely for signs of just how many beans China bought over the past month.
The USDA is also holding its Annual Outlook Forum this week, with acreage estimates for 2019 out on Thursday. Average trade guesses are predicting soybean seedings in the U.S. of around 86.1 million acres, which would be down by three million on the year.
CORN futures were also higher on the day amid ideas that China may start buying more U.S. corn following recent comments from President Donald Trump.
Traders generally expect U.S. corn seedings to be up on the year in 2019, with average estimates coming in at around 91 million acres.
WHEAT futures were lower, seeing some follow through selling as U.S. wheat continued to try and uncover some demand. Bearish technical signals added to the declines.
Export demand remains soft, with the U.S. missing out on the latest Egyptian tender once again.
