North American Grain and Oilseed Review: Canola stronger, but signs of weakness

Intercontinental Exchange (ICE) canola futures closed stronger on Monday, gleaning support from other edible oils.

However an analyst warned that it wouldn’t take much for the Canadian oilseed to drop back significantly. He noted canola reacted more sluggish that usual to the increases in the Chicago soy complex made last week.

The analyst said the commercials are largely on the sidelines and most farmers are holding back their canola in hopes of larger cash prices.

There were sharp upticks in Chicago soybeans, with moderate increases in soymeal while soyoil was virtually unchanged. More support was derived from gains in European rapeseed and Malaysian palm oil. However, global crude oil prices were stepping back, putting pressure on edible oils.

The Canadian dollar was higher at mid-afternoon, with the loonie at 78.97 U.S. cents, compared to Friday’s close of 78.38.

There were 28,301 contracts traded on Monday, which compares with Friday when 16,233 contracts changed hands. Spreading accounted for 17,042 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 1,029.50 up 12.50
May 1,018.40 up 16.40
Jul 989.90 up 13.50
Nov 846.20 up 11.50

SOYBEAN futures at the Chicago Board of Trade (CBOT) saw sharp upticks on Monday, but soyoil was virtually unchanged.

The United States Department of Agriculture (USDA) announced a private sale of 507,000 tonnes of soybeans to unknown destinations. About 49 per cent of the soybeans are to be delivered during the current marketing year with the remaining 51 per cent to be delivered during 2022/23.

The USDA reported weekly export inspections of soybeans at 1.217 million tonnes as of Feb. 3 and up 1.7 per cent from the previous week. The year-to-date inspections total 37.642 million tonnes which are 23.8 per cent behind last year.

The department is scheduled to release its next monthly supply and demand estimates on Wednesday at 11 am CST. Ahead of the report, the trade forecasts soybean ending stocks to pull back to 310 million bushels from 350 million in January. That said, there have been indications the numbers to watch will be those for South America, with Brazil soybeans predicted to be 133.5 million tonnes and Argentina soybeans at 44 million.

Brazil-based consultancy AgRural pegged the country’s soybean harvest to be 16 per cent complete, for a gain of six points on the week. There are numerous reports of quality concerns due to moisture levels.

CORN futures were stronger on Monday, getting support from soybeans and wheat.

Market expectations place corn ending stocks at 1.51 billion bushels, versus 1.54 billion last month.

Weekly corn export inspections came to 1.053 million tonnes and up 1.7 per cent from last week. The year-to-date inspections are near 18.6 million tonnes and down 13.9 per cent from a year ago.

The trade foresees Brazil corn production at 113.3 million tonnes and 52.1 million for Argentina.

AgRural estimated 18 per cent of Brazil’s first corn crop has been harvested, four points ahead of last year’s pace. Another report placed the planting of the second corn crop at 20 per cent finished.

Corn in Argentina was reported to be 60 per cent silking and 35 per cent at the filling stage.

WHEAT futures were higher on Monday, following reports that said drought conditions have expanded in the U.S. Southern Plains.

Wheat ending stocks are expected to remain firm at 633.8 million bushels, up one million from January.

Wheat export inspections tallied 417,750 tonnes for a gain of 10.9 per cent from last week. The year-to-date reached 14.024 million tonnes, which are 17.8 per cent below those from a year ago.

The ongoing tensions between Russia and Ukraine continued to underpin wheat, despite suggestions from France that a resolution to a potential war is close at hand. However, the U.S. State Department asserted on Sunday that a Russian invasion of Ukraine is imminent.

The Western Producer

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