North American Grain and Oilseed Review: Losses become moderate gains in most months

Intercontinental Exchange (ICE) canola futures nearly erased all earlier losses at the close on Tuesday, with only a small decline in the nearby March contract.

Support came from another round of sharp upswings in global crude oil prices, which spilled over into edible oils. That saw gains in the Chicago soy complex, as well as Malaysian palm oil and most positions for European rapeseed.

Ongoing tight supplies and need to ration demand also underpinned canola. However, the liquidation of nearby old crop positions helped to temper further increases.

The Canadian dollar swung higher at mid-afternoon, with the loonie at 79.22 U.S. cents, compared to Monday’s close of 79.01.

Statistics Canada issued its monthly crush report, which showed 704,696 tonnes of canola were processed in December. That’s down 22.1 per cent from the previous December.

Also, the federal agency released its monthly grain deliveries report which showed total deliveries for December were 3.22 million tonnes. That’s a drop of 43.5 per cent from a year ago. Canola deliveries tallied 1.25 million tonnes, down 42.4 per cent.

There were 29,702 contracts traded on Tuesday, which compares with Monday when 30,310 contracts changed hands. Spreading accounted for 19,260 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 995.20 dn 0.70
May 987.60 up 2.10
Jul 968.40 up 8.90
Nov 834.00 up 1.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) rebounded somewhat from yesterday’s losses on Tuesday, due to a spike in global crude oil prices.

A farm Futures survey pegged 2022/23 planted soybean acres in the United States at 92.38 million, which would be 5.9 per cent more than what was seeded last year. It would also mark the second time soybean acres were greater than those for corn.

AgRural estimated the soybean harvest in Brazil to be five per cent complete. The consultancy pegged production at 133.4 million tonnes. However, a crop tour forecast the harvest at 125 million tonnes. A report noted that 42 per cent of Argentina’s crops are still in drought conditions.

Dr. Michael Cordonnier of Soybean and Corn Advisor Inc. kept his latest South American forecasts at 134 million tonnes of soybeans for Brazil and 43 million for Argentina.

CORN futures were narrowly mixed on Tuesday, getting pressure from declines in spring wheat.

The Farm Futures survey placed forthcoming U.S. planted corn acres at 90.39 million, which would be down 3.2 per cent from 2021.

Cordonnier maintained his calls for corn production, with Brazil at 112 million tonnes and Argentina at 51 million.

The consumption of E85 ethanol in France rose 33 per cent in 2021 at 121.5 million gallons. Expectations are for even greater demand for E85 in 2022.

WHEAT futures were mixed on Tuesday, with double-digits gains for Chicago and Kansas City, while Minneapolis was steady to lower.

State-by-state winter wheat ratings from the U.S. Department of Agriculture (USDA) showed the crop in Kansas was only 30 per cent good to excellent, Oklahoma at a paltry 16 per cent, and Texas at a mere seven per cent. Ongoing drought conditions were to blame.

Planted winter wheat acres are projected to increase 4.7 per cent this year at 35.22 million, according to Farm Futures. Spring wheat acres are to drop 5.4 per cent at 10.81 million and those for durum are to fall 6.5 per cent at 1.53 million.

Tensions along the Russia-Ukraine border continued to underpin wheat values. A report said the U.S has 8,500 troops at the ready for deployment to Ukraine if Russia invades.

Unfavourable weather has halted or curtailed the loading of grain vessels on the Black Sea, especially at Ukrainian ports.

The Western Producer

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