By Phil Franz-Warkentin, MarketsFarm
Winnipeg, Aug. 13 (MarketsFarm) – The ICE Futures canola market was weaker on Tuesday, with losses in Chicago Board of Trade soyoil behind some of the spillover selling pressure.
News that the United States would delay imposing 10 per cent tariffs on some Chinese imports contributed to the weakness in canola, according to a trader, as easing tensions between those two countries would likely see more U.S. soybean sales at the expense of vegetable oil business.
Relatively favourable weather across much of Western Canada, despite dryness in some areas and recent cooler temperatures, also weighed on values.
Bearish technical signals added to the softer tone, as fund traders continued to add to their large short positions.
About 18,886 canola contracts traded on Tuesday, which compares with Monday when 17,615 contracts changed hands. Spreading accounted for 11,050 of the contracts traded.
CORN futures at the Chicago Board of Trade were weaker on Tuesday, seeing follow-through selling after Monday’s limit-down losses.
The United States Department of Agriculture unexpectedly raised its yield forecast for the U.S. corn crop to 169.5 bushels per acre and pegged total production at 13.9 billion bushels, in a report released Monday. Average pre-report guesses had been for much smaller yields and a crop closer to 13 billion bushels than 14 billion.
Losses in the cattle and hog markets were also bearish for the feed grain on Tuesday.
However, crop development is running behind normal, according to the latest weekly report, with 57 per cent in good-to-excellent condition.
SOYBEAN futures were higher on Tuesday, correcting after yesterday’s losses.
U.S. soybean production is expected to be down 18 per cent on the year, according to the USDA, at 3.7 billion bushels.
Weekly condition ratings for the U.S. soybean crop were left unchanged at 54 per cent good to excellent.
WHEAT futures were steady to lower, as Monday’s large world and U.S. wheat production estimates remained bearish.
The U.S. winter wheat harvest was 89 per cent complete in the latest weekly report, which is behind the average of 96 per cent done. The spring wheat harvest was only 8 per cent done, well off the 30 per cent average for this time of year.
Condition ratings for the spring wheat still in the ground declined 3 points, to 69 per cent good-to-excellent.