North American Grain and Oilseed Review: Canola back on the rise

Intercontinental Exchange (ICE) canola futures climbed higher on Wednesday, showing a little bit of independent strength.

Canola also received support from gains in Chicago soybeans and soymeal. However, those increases were tempered by losses in Chicago soyoil and Malaysian palm oil. Meanwhile, European rapeseed was mixed.

Global crude oil prices turned around on Wednesday with losses weighing on vegetable oil values.

With recent cuts to canola production in Canada and a record canola harvest in Australia, the trade is concerned that Canada’s exports will be well short of the projected 9.3 million tonnes.

The Canadian dollar was relatively steady at mid-afternoon, with the loonie at 73.30 U.S. cents, compared to Tuesday’s close of 73.27.

There were 26,164 contracts traded on Wednesday, which compares with Tuesday when 26,439 contracts changed hands. Spreading accounted for 17,092 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

                   Price     Change

Canola          Jan     863.60    up 14.10

                Mar     852.40    up 12.70

                May     853.80    up 11.40

                Jul     855.40    up 10.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, with more double-digit increases. Soymeal was higher as well, but soyoil pulled back.

The United States Department of Agriculture (USDA) issued its October census report, showing soybean exports for that month were 9.78 million tonnes, down nine per cent from October 2021. Soymeal exports were 871,000 tonnes, falling 12 per cent and soyoil export plummeted 59.6 per cent at 10,000 tonnes.

The USDA is set publish its December supply and demand estimates on Friday, with the trade calling for soybean ending stocks of 200 million to 296 million bushels. The November carryover forecast was 220 million bushels.

Brazil’s 2022/23 soybean crop is reported to be in good shape, although hot and dry conditions in the country’s south has added a measure of stress to it.

Argentina is forecast to remain dry with temperatures exceeding 38 degrees Celsius, putting a great deal of stress on its soybean and other crops.

WHEAT futures were higher on Wednesday, having what a trader called a “dead cat bounce.”

The U.S. Southern Plains are forecast to remain dry, adding to the region’s drought conditions. Some isolated showers are to bring rain to parts of the Central Plains, while the Northern Plains are to see light snow. Any changes in La Nina could generate needed rain for the Southern Plains in January.

Going into the USDA report, the market has the wheat carryout at 551 million to 602 million bushels. Last month it was pegged at 571 million bushels.

The census placed U.S. October wheat exports at 1.38 million tonnes, up 11 per cent from a year ago.

CORN futures were higher on Wednesday, benefitting from spillover from soybeans and wheat.

The USDA census estimated October corn exports at 2.08 million tonnes, dropping 48.7 per cent from a year ago. Ethanol exports in October amounted to 83.77 million gallons, down 21 per cent from the previous October.

Market expectations for Friday’s S&D report put the corn carryover at 1.17 billion to 1.35 billion bushels, compared to November’s 1.18 billion.

About a quarter of Argentina’s corn has been planted, according to a report.

Tags: futures, soymeal, corn, canola, soybeans, wheat, soyoil, rapeseed, palm oil