North American Grain and Oilseed Review: Canola pulls back due to profit-taking

WINNIPEG, Aug. 9 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower on Monday due to a round of profit-taking after prices climbed last week.

Weakness in Chicago soybeans and soyoil, as well as declines in European rapeseed and Malaysian palm oil added pressure on canola.

Losses were tempered by small gains in Chicago soymeal and a lower Canadian dollar. At mid-afternoon, the loonie was at 79.55 U.S. cents compared to Friday’s close of 79.68.

The thunderstorms over parts of the Prairies are expected to have little, if any, effect on prices. The rain will cause a slight delay to the harvest across the region, but temperatures are forecast to rise throughout the week.

Due to severe drought, trade expectations place canola production at 15 million to 17 million tonnes, well below the 20 million previous anticipated.

There were 8,154 contracts traded on Monday, which compares with Friday when 10,623 contracts changed hands. Spreading accounted for 3,914 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 882.20 dn 9.60
Jan 866.80 dn 10.00
Mar 850.60 dn 9.90
May 831.50 dn 9.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Monday, due to a poor week in exports.

The United States Department of Agriculture (USDA) reported weekly export inspections of soybeans were 114,253 tonnes for the week ended Aug. 5. That’s a drop of 61.8 per cent from the previous week. The year-to-date soybean inspections totaled 58.39 million tonnes for a 45 per cent increase from 2019/20.

The USDA announced a private sale of 104,000 tonnes of soybeans to unknown destinations. Delivery is to be sometime during the 2021/22 marketing year, which for soybeans begins Sept. 1.

The department is scheduled to issue its monthly supply and demand estimates on Thursday. Ahead of the report, the average trade guess puts the U.S. soybean yields at 50.3 bushels per acre (BPA), down slightly from the department’s July estimate of 50.8.

A private consultancy pegged the 2021/22 Brazil soybean crop at a record 142.2 million tonnes.

China reported its soybean imports in July totaled 8.67 million tonnes.

CORN futures were lower as well on Monday, also due to exports.

At 667,220 tonnes, U.S. corn export movement fell 47.7 per cent on the week. The year-to-date inspections tallied 63.52 million tonnes, for a 61 per cent jump from 2019/20.

The average trade projection for U.S. corn yields is 177.4 BPA, down from the July estimate of 179.5.

While the trade expects the USDA to maintain its call on Argentine corn production at 48.5 million tonnes, its projection Brazilian production is to tumble further at 88 million tonnes. Total corn production in Brazil was initially anticipated to be around 105 million tonnes, but drought and frost severely diminished the country’s second crop.

WHEAT futures were down on Monday, caught up in the spillover from soybeans and corn.

The USDA reported wheat export inspections of 605,793 tonnes, up nearly 67 per cent on the week. The year-to-date inspections for 2021/22 were just short of 4.4 million tonnes for a decline of 14.9 per cent from 2020/21.

Ahead of Thursday’s S&D report, total U.S. wheat production is projected to decline by 22.5 million bushels. While the winter wheat is expected to increase slightly, the trade called for a sharp drop in spring wheat and durum production.

The Western Producer

Tags: soybeans, North American Grain and Oilseed Review, wheat, ICE, canola futures, futures, corn, USDA, canola