North American Grain and Oilseed Review: Edible oils take canola higher

Intercontinental Exchange (ICE) canola futures closed higher on Wednesday, after starting the day sharply to the downside.

Support came from good upswings in the Chicago soy complex, Malaysian palm oil and European rapeseed. While global crude oil prices moderated during the day, they still spilled over into edible oil values.

Further declines in South American soybean production, as forecast by the United States Department of Agriculture, also underpinned oilseeds.

The Canadian dollar was pushing upwards at mid-afternoon, with the loonie at 78.90 U.S. cents, compared to Tuesday’s close of 78.68.

There were 21,939 contracts traded on Wednesday, which compares with Tuesday when 28,512 contracts changed hands. Spreading accounted for 14,028 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 1,026.60 up 3.80
May 1,013.50 up 6.40
Jul 984.90 up 4.20
Nov 846.00 up 4.80

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, after the United States Department of Agriculture released its monthly supply and demand estimates.

In the report, the USDA kept 2021/22 domestic soybean production at 120.71 million tonnes, but trimmed the carryover to 8.84 million tonnes.

The department lopped five million tonnes off of its call on 2021/22 soybean production in Brazil at 134 million and sliced 1.5 million tonnes from Argentine production at 45 million, with slightly lower ending stocks for both countries. China’s total imports were cut three million tonnes at 97 million.

World production fell to 363.86 million tonnes and the carryover dropped to 92.83 million.

The USDA announced a private sale of 240,000 tonnes of soybeans to China. Delivery is to be during the 2022/23 marketing year.

Brazil’s CONAB is scheduled to release its latest supply and demand report on Thursday.

CORN futures were up significantly on Wednesday, gleaning support from the S&D report, plus spillover from soybeans and wheat.

The USDA maintained its projection of the U.S. corn output for 2021/22 at 383.94 million tonnes and ending stocks at 39.11 million.

The department trimmed one million tonnes from 2021/22 Brazil corn production at 114 million and kept Argentina at 54 million. China’s corn imports were maintained at 26 million tonnes.

Global production for 2021/22 dipped to 1.205 billion tonnes and ending stocks slipped to 302.22 million tonnes.

The U.S. Energy Information Administration reported production for the week ended Feb. 4 lost 47,000 barrels per day, placing output at an 18-week low of 994,000 BPD. Ethanol stocks were reported at 24.8 million barrels.

WHEAT futures swung higher on Wednesday, with double-digit gains for Kansas City and Minneapolis.

The USDA held total domestic wheat production at 44.79 million tonnes, but raised the carryover to 17.63 million.

Consultancy IKON has projected a record wheat crop for Australia at 39 million tonnes. The USDA stuck with its call of 34 million tonnes.

In international purchases South Korea bought 65,000 tonnes of feed wheat, while Japan tendered for 80,000 tonnes of feed wheat and 100,000 tonnes of barley.

The Western Producer

Tags: canola futures, wheat futures, edible oil, prices, soybean futures, corn futures, rapeseed, palm oil