North American Grain and Oilseed Review: A round of gains for canola

Canola futures on the Intercontinental Exchange (ICE) closed stronger on Tuesday benefitting from gains in other vegetable oils.

There were good upticks in the Chicago soy complex and in European rapeseed. Small declines in the off session of Malaysian palm oil attempted to temper further increases in canola.

Global crude oil prices gave up their gains made this morning and turned lower, applying pressure to veg oils.

Temperatures across the Prairies are forecast to rise towards 30 degrees Celsius by the weekend. A system that brought rain to the region has departed with several days of no precipitation now expected.

Statistics Canada reported canola deliveries for June were nearly 924,794 tonnes, down 34.5 per cent from the previous June.

The Canadian dollar was lower at mid-afternoon, with the loonie pulling back to 77.53 U.S. cents, compared to Monday’s close 77.81.

There were 21,018 contracts traded on Tuesday, which compares with Monday when 17,604 contracts changed hands. Spreading accounted for 14,976 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 813.80 up 18.70
Jan 822.10 up 18.70
Mar 830.50 up 19.10
May 837.90 up 19.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Tuesday, due to a reduction in crop conditions and the prospect of hot, dry weather into next month.

The United States Department of Agriculture (USDA) issued its weekly crop progress report yesterday afternoon. For the week ended July 24, soybeans are 59 per cent good to excellent. That’s a loss of two points on the week. Soybeans blooming gained 16 points to reach 64 per cent. Soybeans setting pods added 12 points at 26 per cent.

Until the USDA’s August supply and demand estimates, an analyst said the markets will follow the weather.

There have been unconfirmed reports of China purchasing 25 cargoes of soybeans from Brazil last week.

CORN futures were stronger as well on Tuesday for the same reasons as soybeans.

The weather outlook for the U.S. Corn Belt continued to call for dry conditions for the next two weeks. The lack of rain could put stress on corn and other crops.

The USDA said corn conditions were 61 per cent good to excellent, down three points on the week. Corn silking added 25 points at 62 per cent and corn dough rose seven at 13 per cent.

AgRural reported the harvest of the second corn crop in Brazil reached 62 per cent complete, up nine points on the week. The consultancy pegged the second harvest at 87.3 million tonnes.

The European Union lowered its call on the corn yield to 107.8 bushels per acre, down 1.6 per cent from the previous estimate due to the excessive heat.

WHEAT futures were up significantly on Tuesday due reduced crop ratings and tightening supplies.

U.S. spring wheat slipped back three points at 68 per cent good to excellent, according to the USDA. Spring wheat headed advanced 18 points at 86 per cent.

The USDA reported winter wheat harvest was up seven points at 77 per cent complete. An analyst noted there has been a few instances of spring wheat being combined in South Dakota.

Ukraine said it could be possible to export 3.5 million tonnes of grain per month out of its war-torn ports. Russia bombed the ports south of Mykolaiv, but these ports were not covered in the recently signed grain export deal with Ukraine.

The E.U. reduced its projection of the soft wheat harvest to 85.4 bu/ac. which would be nearly five per cent less than last year.

Statistics Canada reported yesterday that total wheat deliveries in June came to approximately 1.54 million tonnes, down nearly 50 per cent from a year ago.

Kazakhstan projected its 2022/23 wheat crop to produce 13 million to 13.5 million tonnes, for an average increase of 2.2 million tonnes from last year.

Tags: wheat, rapeseed, palm oil, soy, futures, сanola, corn, vegetable oils, soybean