Canada Markets

Speculative Traders Show Caution in Canola Market

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This chart compares the CFTC's noncommercial net-long position for soybeans (blue bars), soybean oil (red bars), soymeal (purple bars) and canola (yellow bars). Despite bullish fundamentals, noncommercial traders have shown recent caution in the canola market. (DTN ProphetX chart)

CFTC data as of March 8 shows noncommercial traders increasing their bullish net-long position in soybean oil, soymeal and canola futures although major differences exist, as seen on the attached chart.

Speculative traders pared their bullish bets on soybean futures for a second week as of March 8 (blue bars), while the current position of 216,577 contracts remains close to the largest position held since June 8, 2021.

At the same time, the size of this position grew larger for both soybean oil (red bars) and soymeal (purple bars). The noncommercial net-long position for soybean oil increased for the fourth consecutive week to 91,682 contracts, or the largest held since April 20, 2021, when this position was reported at 96,464 contracts. The purple bars show the noncommercial net-long position for soymeal increasing for the sixth consecutive week to 121,604 contracts, the largest since Dec. 29, 2020.

The lower study on the attached chart shows the noncommercial net-long position for canola futures increasing for the third time in four weeks to 48,787 contracts, while remaining close to the smallest net-long position reported in the past 23 weeks. Despite canola's bullish fundamentals, traders have shown a great deal of caution since holding a record bullish net-long position of 74,055 contracts as of Jan. 11, 2022.

Global oilseed markets remain volatile with concerns arising on both the supply and demand side of the equation, while Russia and Ukraine will be entering into Day 2 of peace talks on March 15, which has also tempered trade in crude oil Monday.

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