North American Grain and Oilseed Review: Old crop up, new crop down

Intercontinental Exchange (ICE) canola futures were mixed on Thursday, with the gains confined to the old crop months.

Support came from gains in Malaysian palm oil and the front months of European rapeseed. Pressure was derived from losses in the Chicago soy complex and rapeseed’s more deferred positions.

Concerns towards the severed rail links to the Port of Vancouver threw some caution into the markets. However, a trader noted that Canada’s grains exports are generally lower so far this marketing year and the impact has not been as notable.

Tight supplies, price rationing and uncertainty over this year’s Prairie harvest continued to underpin canola values. There were thoughts that canola was becoming too expensive in relation to other edible oils.

At mid-afternoon the Canadian dollar was relatively steady, with the loonie at 79.35 U.S. cents, compared to Wednesday’s close of 79.40.

There were 20,655 contracts traded on Thursday, which compares with Wednesday when 55,608 contracts changed hands. Spreading accounted for 14,774 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,014.10 up 10.40
Mar 991.40 up 6.70
May 960.00 up 4.20
Jul 922.10 up 1.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Thursday, in a round of profit-taking.

The United States Department of Agriculture (USDA) issued its weekly export sales report and for the week ended Nov. 11 soybean sales for 2021/22 came to 1.38 million tonnes. That was up 13 per cent from the previous week. Soymeal tallied 183,000 tonnes, down 34 per cent from a week ago, while soyoil amounted to 67,500 tonnes.

Good weather continued to benefit the soybean crop in Brazil and recent precipitation has given a boost to the Argentina crop. Reports said Brazil is looking to begin its soybean harvest in late January or early February.

Members of the United Auto Workers (UAW) striking at a number of John Deere plants in the U.S. have accepted a tentative agreement with the company.

CORN futures were slightly lower on Thursday, getting some spillover from soybeans.

Global crude oil prices were higher and pushing up biofuel values.

The USDA reported corn export sales of 904,600 tonnes, which was a 15 per cent decline from the previous week. Of the amount sold, 230,000 tonnes are destined for Canada. There were also export sales of 140,000 tonnes of 2022/23 corn.

Showers of up to a half inch are to fall over parts of the U.S. Eastern Corn Belt, slowing what’s left of the region’s corn harvest.

As with South American soybeans, favourable weather has benefitted corn crops in Argentina and Brazil. Across the Atlantic, rain showers were helping the corn crop in South Africa.

WHEAT futures took a step back Thursday on profit-taking.

Export sales of wheat came to 399,100 tonnes, for a 40 per cent increase from last week, according to the USDA.

Strategie Grains cut 4.7 per cent off of its estimate for European Union 2021/22 soft wheat exports, which is now at 30.4 million tonnes. The consultancy said France will be facing stiffer international competition. Reports said Paris milling wheat futures hit all-time highs today.

Russia sold nearly 250,400 tonnes of wheat to Algeria, which usually buys from France.

IKAR has projected the 2022 Russian wheat crop at 79 million tonnes, up 4.5 per cent from its previous forecast. However, the Russian agriculture ministry has predicted a crop of 84 million tonnes. IKAR noted fertilizer shortages could lead to reduced yields and quality.

Rain in Argentina has helped its wheat crop, but in the Middle East, a water shortage in Iran has meant its wheat crop will come up two million tonnes short.

The Western Producer

Tags: canola futures, wheat futures, gains, grains exports, soybean futures, corn futures, markets, rapeseed, palm oil