North American Grain and Oilseed Review: Nearby months incur losses

WINNIPEG, Aug. 10 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures saw declines in the front months on Tuesday due to shrinking crush margins weighing on values. The more deferred positions posted small gains.

Over the last week, ICE canola crush margins, as of Aug. 9, have withered from C$72.72 per tonne for November-October to C$5.35. Similarly, November-December tumbled from C$69.35/tonne to C$6.03.

The slim crush margins are a result of tightening canola supplies that have also curtailed trading volumes, which are approximately half of normal volumes.

Gains in the Chicago soy complex and European rapeseed tempered losses in canola, while little movement in Malaysian palm oil provided no firm direction.

There will be a better idea of where the canola harvest is at with the release of the weekly Manitoba crop report later this afternoon. Saskatchewan issues its report on Thursday, followed by Alberta on Friday.

The market will be positioning ahead of Thursday’s monthly supply and demand estimates from the United States Department of Agriculture. Meanwhile, Statistics Canada is scheduled to issue its principal crop report on Aug. 30.

At mid-afternoon, the Canadian dollar was stronger with the loonie at 79.82 U.S. cents compared to Monday’s close of 79.59.

There were 13,294 contracts traded on Tuesday, which compares with Monday when 8,154 contracts changed hands. Spreading accounted for 6,248 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 878.30 dn 3.90
Jan 864.40 dn 2.40
Mar 850.00 dn 0.60
May 832.40 up 0.90

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Tuesday following two private sales.

The United States Department of Agriculture (USDA) reported one sale for 132,000 tonnes to China and the other for 130,000 tonnes to unknown destinations. Delivery for both is to be during the upcoming marketing year.

On Monday afternoon the USDA issued its weekly crop progress report, and for the week ending Aug. 8 soybean conditions held at 60 per cent good to excellent. Soybeans blooming reached 91 per cent and soybean setting pods were at 73 per cent.

On Thursday the department will release its August supply and demand estimates. Dr. Michael Cordonnier of Soybean and Corn Advisor Inc. stated he’s keeping his soybean yield projection at 50 bushels per acre (BPA). However, the doctor stressed more rain will be required going forward.

The Brazil oilseed processors association Abiove has projected the country’s 2021 soybean exports at 86.7 million tonnes, for a 4.6 per cent increase over 2020’s exports. Abiove has pegged Brazil soybean production at 137.5 million tonnes, for a 7.5 per cent increase over 2020. Meanwhile CONAB estimated this year’s production at 135.98 million tonnes, upping its call by 660,000 tonnes from last month.

CORN futures were slightly lower on Tuesday with a private sale and corn conditions playing off of each other.

The USDA reported a sale of 182,880 tonnes of corn to Mexico. About 83 per cent is to be delivered sometime during the 2021/22 marketing year with the balance coming in 2022/23.

The department said corn conditions improved by two points on the week at 64 per cent good to excellent. Corn silking hit 95 per cent and corn dough was at 56 per cent. The first report this year of corn dented registered at eight per cent.

Dr. Cordonnier has also kept his U.S. corn forecast at 175.5 BPA. He dropped his call on Brazil corn production to 84 million tonnes, while keeping his forecast for Argentina at 48 million.

The DTN Yield Tour estimated corn yields for Nebraska at 188 BPA, South Dakota at 143 and 120 for North Dakota.

AgRural reported the Brazil second corn harvest was behind pace at 58 per cent complete, versus 70 per cent a year ago.

WHEAT futures were higher on Tuesday, with doubled digit gains for the winter wheats and a moderate increase for spring wheat.

The USDA pegged the winter wheat harvest at 95 per cent complete, and this is the final week it will be reported. The spring wheat harvest more than doubled at 38 per cent finished.

The condition of U.S. spring wheat improved by a single point to 11 per cent good to excellent. Conversely spring wheat was at 61 per cent poor to very poor and in Washington it’s at 93 per cent poor to very poor to be the state with the worst wheat rating in the country.

Ukraine added another one million tonnes to its current wheat production, which is now at 30.5 million.

Rain was slowing the loading of vessels in France with wheat. In July only two vessels with loaded and were destined for France’s top wheat buyer Algeria, according to Refinitiv with eight ships this month either loading or were loaded.

The Western Producer

Tags: canola, North American Grain and Oilseed Review, ICE, futures