North American Grain and Oilseed Review: Canola drops back with comparable oils

WINNIPEG, Aug. 18 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were down sharply on Wednesday, due to declines in the Chicago soy complex, Malaysian palm oil and European rapeseed.

Nevertheless, canola remains to be expensive when compared to other edible oils. One aspect of that was in the latest ICE canola crush margins, which placed the November-October contract at minus C$1.05 per tonne and among record lows.

The ever tightening of canola supplies, along with uncertainty over this year’s crop has continued to underpin values. Expectations of a harvest of 15 million to 17 million tonnes have become unlikely, with production maybe at 13 million to 14 million tonnes.

Temperatures on the Prairies began to moderate in the western half and will soon do in the eastern portion. That cooling is likely to generate rainfall later this week.

At mid-afternoon, the Canadian dollar was relatively steady, with the loonie at 79.16 U.S. cents compared to Tuesday’s close of 79.22.

There were 21,087 contracts traded on Wednesday, which compares with Tuesday when 13,781 contracts changed hands. Spreading accounted for 10,408 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 904.80 dn 13.50
Jan 890.50 dn 11.10
Mar 871.90 dn 10.30
May 850.10 dn 10.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Wednesday, as soybean pod counts were holding their own.

The Pro Farmer Crop Tour estimated soybean pod counts in Nebraska at 1,181 per three-foot by three-foot square. The pod count in Indiana was pegged at 1,117. Although lower than last year, yesterday’s pod counts were above each state’s three-year average. The tour continued through Iowa and Illinois today, with more results this evening.

The United States Department of Agriculture (USDA) announced for the 10th consecutive day a major private sale of soybeans to China. Today it was for 131,000 tonnes, with deliver during the upcoming marketing year.

Ahead of tomorrow’s USDA export sales report, Futures International has predicted old crop sales of net reductions of 75,000 tonnes to more than 100,000 tonnes on the plus side. New crop sales were pegged at 1.4 million to 1.8 million tonnes.

Futures International slated old crop soymeal sales to be 25,000 to 125,000 tonnes, with new crop between 50,000 to 175,000. Old crop soyoil sales are projected to be zero to 500 tonnes.

CORN futures were higher on Wednesday, but were tempered by lower ethanol production.

The U.S. Energy Information Administration (EIA) said average daily ethanol production was below one million barrels for a second-straight week, at 973,000 barrels per day (BPD). It was first time production was below that mark since mid-May. Ethanol stocks were down almost 1.18 million barrels at 21.56 million.

The tour forecast corn yields in Nebraska to be 182.6 bushels per acre and 193.5 for Indiana.

Old crop corn export sales were projected to be a net reduction of 100,000 tonnes to plus 200,000, with new crop at 300,000 to 500,000 tonnes, according to Futures International.

WHEAT futures were higher as well on Wednesday, with the strongest gains of the day for Kansas City.

North Dakota and Minnesota are forecast to receive rain later this week. While the rain won’t be of much help to either state’s spring wheat, it could for any later developing crops.

Wheat export sales are expected to be 250,000 to 500,000 tonnes.

China reported it acquired 888,000 tonnes of wheat in July, which was 5.2 per cent than in July 2020. At 6.25 million tonnes, year-to-date imports were almost 46 per cent ahead of those last year.

At this point in 2021/22, the European Union reported its year-to-date wheat exports amounted to 2.33 million tonnes, for a gain of 110,000 so far.

In international purchases, Egypt said it bought 180,000 tonnes of wheat from Romania and Ukraine, while Japan has tendered for nearly 143,800 tonnes of food wheat, 80,000 tonnes of feed wheat plus 100,000 tonnes of barley. Morocco issued a tender for 363,000 tonnes of durum to come from the U.S.

The Western Producer

Tags: canola, North American Grain and Oilseed Review, soybean, CBOT