North American Grain and Oilseed Review: Canola down, but away from lows

Intercontinental Exchange (ICE) canola futures were lower on Monday, due to pressure from declines in Chicago soyoil and European rapeseed.

Gains in Malaysian palm oil as well as those in Chicago soybeans and soymeal helped to pull canola away from earlier lows.

Tight supplies and the need to price ration continued to underpin canola. A measure of certainty over this year’s lackluster harvest on the Prairies won’t be available until Statistics Canada releases its production report on Dec. 3.

A trader warned the specs have run up a massive long position in canola. He said that will make it very difficult to sell when the time comes.

At mid-afternoon the Canadian dollar was stronger, with the loonie at 79.96 U.S. cents, compared to Friday’s close of 79.59.

There were 33,909 contracts traded on Monday, which compares with Friday when 29,529 contracts changed hands. Spreading accounted for 21,788 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,012.90 dn 12.40
Mar 978.90 dn 12.60
May 942.40 dn 12.60
Jul 901.80 dn 10.10

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Monday along with gains in soymeal. However, the heavy liquidation in the soyoil/soymeal spread saw the former pull back.

United States President Joe Biden and Chinese President Xi Jinping are to meet virtually on Monday. They are to discuss a number of matters that have increased tensions between the two countries, including the Phase One trade deal, which the U.S. has accused China of falling well behind in its import obligations.

The U.S. Department of Agriculture announced a private sale of 264,000 tonnes of soybeans to unknown destinations, with delivery to be during the current marketing year.

The USDA issued its weekly export inspections report and for the week ended Nov. 11 soybean shipments were about 2.07 million tonnes, down 28.7 per cent from the previous week. Year-to-date soybean inspections tally 16.19 million tonnes, 28.2 per cent behind last year.

Ahead of the department’s weekly crop progress report, the trade projects the soybean harvest to be more than 90 per cent complete.

The U.S. National Oilseed Processors’ Association said just under 184 million bushels of soybeans were crushed in October, about two million more than trade expectations. Soyoil stocks were reported to be 1.83 billion pounds, around 100 million more than predicted.

As South American weather remains favourable to that continent’s soybean and corn crops, there’s a 83 per cent possibility of the La Nina continuing through to January-March and a 50 per cent chance of it lasting through to March-May.

CORN futures dipped on Monday, as global crude prices were either side of steady.

The USDA said there was a private sale of 198,200 tonnes of corn to Mexico. About three-quarters of the sale is to be delivered during the current marketing year, with the remainder to come in 2022/23.

U.S. corn export inspections came in at 855,698 tonnes, for a jump of 32.2 per cent from last week. The year-to-date inspections amounted to nearly 8.47 million tonnes, 17.6 per cent behind this time last year.

As with soybeans, the U.S. corn harvest is projected is to be over 90 per cent finished.

WHEAT futures were mixed on Monday, with moderate gains in Chicago and Kansas, but a sharp downturn in Minneapolis.

The planting of U.S. winter wheat is expected to be around 90 per cent done. The condition of this year’s crop is believed to have changed very little from last week’s 46 per cent good to excellent.

U.S. wheat export inspections were 388,743 tonnes and up 54.6 per cent from a week ago. Overall year to date inspections stood at 10.31 million tonnes, 14.4 per cent behind those last year.

Reports said Russian exports of wheat have dropped 34 per cent from a year ago, due to a smaller crop and its wheat export tax.

Following heavy rains in Australia, early reports from the wheat harvest have indicated protein levels have been poor.

Algeria, Taiwan and Iraq are said to be tendering for wheat.

The Western Producer

Tags: canola futures, wheat futures, price, soybean futures, corn futures, palm oil