North American Grain and Oilseed Review: Canola continues higher

Intercontinental Exchange (ICE) canola futures were higher on Tuesday, starting the day with a show of independent strength, according to a trader.

He said the nearby January contract could climb higher provided Chicago soyoil remains far above 70 U.S. cents per pound. The trader stressed that massive crush margins need to either pull back significantly or canola prices must rise. He warned that Canada lacks sufficient canola supplies to meet any surge in demand generated by the crush margins.

There was support for canola from good upticks in Chicago soybeans and more moderate gains in Malaysian palm oil and European rapeseed. Chicago soyoil bumped up a little, while soymeal stepped back. Spillover support for vegetable oils came from upswings in global crude oil prices.

The Canadian dollar was higher at mid-afternoon with the loonie rising to 73.39 U.S. cents, compared to Monday’s close of 73.27.

There were 46,640 contracts traded on Tuesday, which compares with Monday when 33,909 contracts changed hands. Spreading accounted for 38,504 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 884.20 up 5.20
Mar 886.10 up 1.50
May 891.80 up 1.50
Jul 894.40 up 1.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Tuesday, soyoil was higher as well but lagged well behind, while there were losses in soymeal.

Ahead of today’s crush report from the United States Department of Agriculture (USDA), the trade projected the September soybean crush to be around 168 million bushels. Soyoil stocks are expected to be approximately 1.98 billion pounds. The report is scheduled to be released at 3 pm CDT.

The USDA crop progress report placed soybeans harvested at 88 per cent finished as of Oct. 30. That’s a gain of eight points on the week and 10 above the five-year average.

Barchart cut its call on U.S. soybean production for 2022/23 by two million bushels, bringing it forecast to 4.76 billion bushels. The USDA is scheduled to issue its next monthly supply and demand report on Nov. 9.

There are roadblocks throughout Brazil as truckers were protesting the election of Luiz Ignacio Lula da Silva as president on Sunday. Lula defeated incumbent Jair Bolsonaro, whose government kept diesel prices low. Reports said the blockades had yet to significantly affect shipments out of Brazil’s ports.

AgRural placed soybean planting in Brazil for 2022/23 at 46 per cent complete as of Oct. 27. That’s up 12 points from the previous week.

The Indonesian export tariff waiver on crude palm oil is to remain in place for the remainder of 2022, provided domestic prices stay under US$800 per tonne.

CORN futures were higher on Tuesday, catching spillover from soybeans and wheat.

A report said bird flu was discovered on a commercial egg farm in Iowa. Officials cited concerns that migrating wild birds could spread the disease.

The USDA reported the corn harvest reached 76 per cent done, advancing 15 points and was 12 above the average pace.

The September U.S. corn crush is projected to come in at more than 394 million bushels. The report is set to be published at 3 pm CDT.

AgRural put the planting of Brazil’s first corn crop of the year at 56 per cent finished, advancing five points on the week.

WHEAT futures were higher on Tuesday in choppy trading that didn’t gain traction until the last few hours of the session.

The USDA noted winter wheat planted reached 87 per cent complete, up eight points on the week and two ahead of the five-year average. Of that 62 per cent has emerged, improving 13 points but four back of the average.

Winter wheat conditions were reported for the first time for the 2022/23 crop year with 28 per cent good to excellent. That’s a drop of 17 points from this time last year and a record low.

France suggested that it’s exploring potential land routes for Ukrainian grain exports. This comes after Russia withdrew from the export agreement. Despite Russia’s move and the increased danger of an attack, a dozen vessels left Ukraine on Monday. A report said there are 218 ships in Ukrainian ports with 101 awaiting inspection prior to departing.

The Buenos Aires Grain Exchange maintained its call on Argentine wheat production in 2022/23 at 15.2 million tonnes.

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