North American Grain and Oilseed Review: Canola reclaims some lost ground

Intercontinental Exchange (ICE) canola futures were higher on Tuesday, in trying to correct from yesterday’s sharp declines. However at the close, gains stepped back from earlier highs.

Support for canola was derived from increases in Chicago soyoil and Malaysian palm. However, losses in European rapeseed as well as Chicago soybeans and soymeal weighed on values.

Tight supplies, price rationing, and uncertainty over this year’s Prairie harvest continued to underpin canola.

At mid-afternoon the Canadian dollar was lower, with the loonie at 79.62 U.S. cents, compared to Monday’s close of 79.89.

There were 23,224 contracts traded on Tuesday, which compares with Friday when 33,909 contracts changed hands. Spreading accounted for 14,704 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,015.80 up 2.90
Mar 986.40 up 7.50
May 952.50 up 10.10
Jul 910.10 up 8.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Tuesday, reversing course from yesterday’s spike, but soyoil saw strong gains.

The United States Department of Agriculture (USDA) reported a private sale of 161,000 tonnes of soybeans to unknown destinations. Delivery is to be during the current marketing year.

The USDA issued its weekly crop progress report on Monday which shows the soybean harvest at 92 per cent complete as of Nov. 14. That’s a gain of five points on the week and the pace is one behind the five-year average.

A video conference between U.S. President Joe Biden and Chinese President Xi Jinping covered a wide range of topics, including trade between the two countries. It’s hoped the conference will lead to reduced tensions and improve trade between the two countries.

Soybean and Corn Advisor’s Dr. Michael Cordonnier kept his forecasts on 2021/22 soybean production in Argentina and Brazil at 50 million and 144 million tonnes respectively.

A report said farmers in Germany are expected to plant four to nine per cent more rapeseed acres in 2021/22, than the 2.45 million acres they seeded in 2020/21.

CORN futures were also lower on Tuesday, getting caught in the spillover from soybeans.

The USDA announced another private sale of corn to Mexico, this one consisting of 270,000 tonnes. Delivery is to be during the current marketing year.

The department reported the U.S. corn harvest reached 91 per cent finished, advancing seven points during the week. The pace is five points ahead of the five-year average.

Cordonnier maintained his calls on Argentina and Brazil corn production for 2021/22 at 53 million and 118 million tonnes respectively.

SovEcon raised its projection on Ukraine’s 2021/22 corn crop by nearly four per cent at a record 39.9 million tonnes.

Vietnam said it will cut its most-favoured nation (MFN) tariffs rates on corn by three points at two per cent effective Dec. 30.

WHEAT futures were weaker on Tuesday, with all three wheats incurring double-digit losses.

The planting of winter wheat in the U.S. reached 94 per cent done, nudging up three points on the week and is on par with the average pace. About 81 per cent of the crop has emerged, up seven and two back of the pace. The crop’s condition was 46 per cent good to excellent, improving by one from last week.

SovEcon reduced its forecast on Ukrainian wheat in 2022/23 by 15 per cent at 27.1 million tonnes, due to reduced acres and smaller yields.

Vietnam reported it will eliminate its MFN tariffs on all classes of wheat come Dec. 30.

In international sales, South Korea passed on all offers for its tender and the Philippines has tendered for 220,000 tonnes of feed wheat. Japan issued its weekly wheat tender, calling for 122,000 tonnes.

The Western Producer

Tags: soybean futures, corn futures, Production, soyoil, palm oil, canola futures, wheat futures, soymeal