By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 21 (MarketsFarm) – The ICE Futures canola market was sharply lower on Wednesday, with a number of factors contributing to the declines.
Speculative profit-taking was behind much of the weakness, with that selling building on itself and exaggerating the declines as many traders looked to exit positions at the same time.
Losses in Chicago Board of Trade soyoil futures and strength in the Canadian dollar combined to cut into crush margins, adding to the softer tone.
Much needed rains in parts of Western Canada were also bearish, although drought concerns remained supportive overall with the moisture at this stage unlikely to improve the yield outlook.
About 23,679 canola contracts traded on Wednesday, which compares with Tuesday when 25,922 contracts changed hands. Spreading accounted for 11,770 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade traded to both sides of unchanged on Wednesday, settling with small gains in the most active new crop months as the market saw some consolidation after posting large price swings earlier in the week.
The soy products were mixed, with gains in soymeal, but losses in soyoil.
Forecasts calling for hot and dry Midwestern weather conditions over the next week provided some support, according to participants.
CORN was also underpinned by the Midwestern weather forecasts, with gains in the winter wheats also supportive.
A bipartisan group of U.S. Senators introduced a bill to repeal the national mandate on blending ethanol in fuel. Meanwhile, the annual targets for renewable fuel standards in the country continue to face delays.
Weekly ethanol production in the U.S., at 1.028 billion barrels per day, was down slightly on the week.
WHEAT futures were mixed with losses in Minneapolis spring wheat and gains in the winter wheats.
While declining production prospects for North American spring wheat due to drought remained supportive, those concerns were thought to be priced into the market for the time being. That accounted for some of the selling pressure in Minneapolis, as the wheat spreads saw some adjustment.
Meanwhile, the advancing U.S. winter wheat harvest was somewhat bearish, but weather issues in Europe and the Black Sea region were supportive.