North American Grain and Oilseed Review: Last minute support comes forth

Intercontinental Exchange (ICE) canola futures closed higher on Wednesday, although there were slight losses in some of the very sparsely-traded new crop contracts.

For most of the session, the declines were in the old crop months, as the trade focuses more and more on the new crop positions. However, towards the end things switched around.

There was spillover from strong gains in the Chicago soy complex, plus more moderate increases in European rapeseed and Malaysian palm oil. Edible oils received support from another day of upswings in global crude oil prices.

After a round of gains the Canadian dollar turned lower at mid-afternoon, with the loonie at 79.01 U.S. cents, compared to Tuesday’s close of 79.18.

There were 26,107 contracts traded on Wednesday, which compares with Tuesday when 29,702 contracts changed hands. Spreading accounted for 20,022 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 997.50 up 2.30
May 991.80 up 4.20
Jul 973.20 up 4.80
Nov 835.00 up 1.00

SOYBEAN futures at the Chicago Board of Trade (CBOT) jumped on Wednesday, due to spillover from more upswings in global crude oil prices.

The Rosario Grain Exchange reported that northern Argentina received up to eight inches of rain this month, but much less rain fell in southern areas.

That said the damage to soybean crops from dry conditions in Argentina, Brazil, Paraguay and Uruguay has been done. Expectations are for combined production to amount to a four-year low of 186.3 million tonnes. The United States Department of Agriculture pegged the four countries at a total of 196.6 million tonnes.

The markets believe the U.S. will benefit from soybean shortages in Brazil, with additional exports to China.

CORN futures were higher on Wednesday, as support from soybeans proved to be stronger than pressure from wheat.

The U.S. Energy Information Administration reported ethanol production for week ended Jan. 21 reached 1.035 million barrels per day. That’s a 1.7 per cent decrease from the previous week. The EIA also said ethanol stocks rose 3.75 per cent at 24.476 million barrels, making that the largest amount since before the COVID-19 pandemic.

WHEAT futures tumbled on Wednesday, as more precipitation fell on wheat-growing regions of the U.S. and global tensions eased somewhat over Russia and Ukraine.

A snowstorm dumped more than two feet of snow across Western Kansas and Eastern Colorado on Tuesday. A chance of snow was forecast for today over the U.S. Northern Plains and Upper Midwest, accompanied by above normal temperatures.

The Ukrainian Minister of Defence stated that the imminent threat of invasion by Russia has waned – for the time being. Russia still has 100,000 troops along its border with Ukraine.

Viterra announced it will acquire U.S. commodity management company Gavilon from Japanese-based investment firm Maruben for US$1.125 billion plus working capital. However, that will exclude Gavilon’s fertilizer business and some of its grain export terminals. The deal is scheduled to be finalized by March 31, 2023.

The Western Producer

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