North American Grain and Oilseed Review: Prices spike as canola plays catch up

Intercontinental Exchange (ICE) canola futures finished stronger on Tuesday after a day of choppy trading following the Christmas break.

Although edible oils were lower December 28, sharp gains made December 27 on the Chicago soy complex and in European rapeseed saw canola attempting to catch up December 28. Fueling the upswing in veg oils has been ongoing concerns over dry conditions in Argentina and southern Brazil. However, the regions are expected to receive rain in the coming days.

Tight canola supplies and need to ration demand added more support.

Frigid weather across the Prairies could adversely affect grain movement this week. Come New Year’s Day, temperatures are forecast to push above normal.

At mid-afternoon the Canadian dollar was relatively steady with the loonie was at 78.02 U.S. cents, compared to Thursday’s close of 78.05.

There were 21,300 contracts traded on Tuesday, which compares with Thursday when 22,980 contracts changed hands. Spreading accounted for 17,352 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,038.50 up 28.80
Mar 1,018.50 up 14.80
May 992.20 up 17.50
Jul 949.50 up 21.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Tuesday, correcting from yesterday’s spike.

The United States Department of Agriculture (USDA) issued its exports inspections report on Monday, which showed outbound movements of soybeans were 1.58 million tonnes for the week ended Dec. 23. That’s down 16.6 per cent from the previous week. The year-to-date exports were now 28.94 million tonnes, 22.8 per cent less than this time last year.

The weather outlook for Argentina and southern Brazil is for rain in the coming days. Dry conditions across both regions continued to be a major concern to the trade.

Dr. Michael Cordonnier has again cut his forecast for soybean production in Brazil, lopping two million tonnes to bring his estimate to 140 million tonnes.

China is encouraging its farmers to grow more soybeans, however there have yet to be any specifics, according to reports.

CORN futures were lower on Tuesday in concert with soybeans and wheat.

The USDA reported corn export inspections of 719,031 tonnes, dropping 28.8 per cent from a week ago. The year-to-date now tallied 12.03 million tonnes, down 14.9 per cent from a year ago.

Cordonnier sliced one million tonnes from his projection on Brazilian corn production, now calling for 114 million tonnes.

Reports said 60 per cent of Argentina’s corn has been planted.

Ukraine’s corn crop came in at a record 39.8 million tonnes.

WHEAT futures were weaker on Tuesday, as production in other countries is on the upswing.

Dry conditions across the U.S. Northern and Southern Plains are posing a challenge to winter wheat crops.

The USDA said wheat export inspections came to 271,349 tonnes. The year-to date outbound shipments came to 11.92 million tonnes, down 18 per cent from a year ago.

Russia said its preliminary estimate for wheat production in 2021 is 75.9 million tonnes. The Agriculture Ministry will issue its final estimate in March. The production forecast for 2022 is for 81.3 million tonnes.

Ukraine said its 2021/22 wheat crop amounted to 32.7 million tonnes.

The Buenos Aires Grain Exchange (BAGE) increased its projection of wheat production in Argentina by 2.4 per cent, bringing its call to 21.5 million tonnes. The BAGE estimated the harvest to be 78 per cent complete.

The Western Producer

Tags: edible oils, wheat futures, prices, soybean futures, corn futures, canola futures