WINNIPEG, Dec 22 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were stronger on Tuesday, with the nearby contracts hitting new highs for a sixth consecutive session. However, gains were at a much slower pace than on Monday.
Ongoing market concerns about the demand for canola outstripping the supply has led to price rationing. Canola ending stocks for 2020/21 were estimated at 1.2 million tonnes.
A trader said crushers are operating at near capacity, despite crush margins falling from about C$125 per tonnes to the low C$80’s per tonne. As well exports continue to far outpace those in 2019/20.
The Chicago soy complex provided spillover support, after it got off to a sluggish start earlier in the day. There was additional support from higher European rapeseed, but lower Malaysian palm oil weighed on values.
At mid-afternoon the Canadian dollar was falling back with the loonie at 77.45 U.S. cents, compared to Monday’s close of 77.83.
There were 23,852 contracts traded on Tuesday, which compares with Monday when 31,358 contracts changed hands. Spreading accounted for 15,560 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jan 638.70 up 4.40
Mar 628.10 up 2.30
May 612.50 up 1.00
Jul 596.40 up 1.50
SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Tuesday, but gains were at a much reduced amount.
The United States Congress overwhelmingly approved a US$2.3 trillion economic stimulus package on Monday. The legislation encompasses the US$900 billion deal for additional pandemic assistance agreed to by Republican and Democrat lawmakers.
China announced that its state-owned trading firm COFCO is expected to import a record 100 million tonnes of soybeans this year and its crush is expected to reach 92.6 million tonnes.
There are a reported 21.4 million tonnes of sold soybeans for export that have yet to be shipped.
Following weekend rain in South America, Dr. Michael Cordonnier of Soybean and Corn Advisor has maintained his projections for soybean production in Brazil and Argentina at 130 million tonnes and 48 million tonnes respectively.
The ongoing strike in Argentina by grain inspectors and oilseed workers reportedly has resulted in a backlog of over 100 vessels waiting to be loaded.
With the holidays the U.S. Department of Agriculture will issue its next weekly export sales report on Wednesday, a day early.
CORN futures were higher on Tuesday, with contracts seeing new highs.
Cordonnier has maintained his forecasts for corn production in Brazil and Argentina at 102 million tonnes and 47 million tonnes respectively.
Dry conditions in the corn-growing areas of the U.S. are becoming a concern to the markets.
There are about 40.6 million tonnes of corn on the books in the U.S. that have yet to shipped, according to reports.
WHEAT futures were higher on Tuesday,
Consultancy IKAR pegged Russian wheat exports at 37.5 million tonnes, for a drop of 2.5 million from its previous estimate.
The European Union said its 2020/21 wheat crop will be around 130 million tonnes, for an increase of more than nine per cent over last year’s production.
The United Kingdom 2020/21 wheat crop is projected to be about 9.7 million tonnes, a fall of 40 per cent compared to the previous year. The U.K. agriculture ministry said wet conditions at planting, followed by dry conditions in the spring were at fault.
