Canola contracts gained almost one percent (November contract +C$4.50 per tonne) on the strength in soybean oil futures and concerns about hot and dry weather in some of the drier areas of the Canadian Prairies

Technically-driven buying at the low set on May 6 also supported canola prices, which rose for only the third time since June 18.

Rapeseed futures on the Matif exchange gained a little more than 1/4 percent (November contract +€1.25 per tonne) on concerns about dry and hot weather in parts of Europe and the strength in soybean oil prices.

FUNDS ACCELERATE THE LIQUIDATION OF SHORT OIL SHARE POSITION DRIVING SOYBEAN OIL FUTURES SHARPLY HIGHER

Soybean futures gained a little more than 1/4 percent (November contract +3 1/4 cents per bushel) on Monday as concerns about the potential for drier weather to develop across the Midwest by the end of July triggered light fund buying. However, the gains were only about 50 percent of the overnight rise as later runs of the weather models mitigated some of the concerns. Technically-driven selling just below the 200-day moving average also weighed on soybean futures. Funds were reported buyers of 1,000 soybean contracts, 4,000 soybean oil contracts and sellers of 1,000 soybean meal contracts.

Fund liquidation of the short oil share position drove soybean oil futures sharply higher despite the modest gains in soybean futures. Most contracts rose more than 1 1/2 percent (August contract +43 basis points per pound), but the December contract gained almost 1 3/4 percent (+48 basis points). Technically-driven selling at the 10-day and 20-day moving averages limited gains, but the rally drove the December contract back above the trendline established by the lows set on May 13 and June 12. The move occurred on the heaviest volume in the last week, which makes it more likely prices will remain above the trendline. However, if USDA’s monthly supply and demand forecasts are bearish, the impact the report will have on soybean prices could push soybean oil values back below the trendline.

Palm oil futures fell by almost one percent (September contract -15 ringgit per tonne) as traders trimmed long positions ahead of the Malaysian Palm Oil Board’s (MPOB) monthly report, which is scheduled to be released on Tuesday at 10:30 p.m. (CDT). Technically-driven selling at the 10-day moving average also weighed on palm oil futures. Prices have remained in a narrow trading range around the psychologically critical 1,950 ringgit per tonne level. In addition to the MPOB report, traders will also be paying close attention to the cargo surveyor data expected to be released Tuesday evening (Wednesday in Malaysia). If the data indicates export demand remains weak, palm oil prices are likely to move lower, even if the MPOB report shows tightening palm oil inventories.

On the Dalian exchange, palm oil futures fell by less than 1/4 percent (September contract -6 yuan per tonne), and soybean oil futures gained a little less than 1/4 percent (September contract +12 yuan per tonne).