North American Grain and Oilseed Review: Rapeseed, profit-taking pull down canola

Intercontinental Exchange (ICE) canola futures finished with declines in the old crop positions on Tuesday, while new crop November was up.

Losses in European rapeseed, especially a sharp drop in its February contract weighed on values. A trader noted that there was some profit-taking in canola as well, which remains expensive due to tight supplies.

A stronger Canadian dollar at mid-afternoon added more pressure. The loonie stood at 79.47 U.S. cents, compared to Monday’s close of 78.87.

Support came from Chicago soyoil and Malaysian palm oil. A strong uptick in global crude oil prices spillover into edible oils.

There were 15,017 contracts traded on Tuesday, which compares with Monday when 13,717 contracts changed hands. Spreading accounted for 7,754 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 1,028.10 dn 2.50
May 999.60 dn 7.30
Jul 951.30 dn 5.10
Nov 792.70 up 4.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly higher on Tuesday in pre-report positioning.

In tomorrow’s supply and demand estimates, the trade believes the United States Department of Agriculture (USDA) will slash 2.3 million tonnes off of the global soybean carryout, bringing it to 99.7 million. In Wednesday’s grain stocks as of Dec. 1, guesses put U.S. stocks at 3.13 billion bushels.

The USDA announced a private sale of 100,000 tonnes of soybeans to Mexico. Delivery is to be during the current marketing year.

CONAB issued its monthly supply and demand estimates, lowering its call on Brazil’s soybean crop by 1.6 per cent at 140.5 million tonnes due to dry conditions. That would still make for a record crop, well surpassing last year’s 137.3 million tonnes.

However, Soybean and Corn Advisor’s Dr. Michael Cordonnier cut his projection for Brazil soybean production by 2.2 per cent from last month to be now 135 million tonnes. He placed the Argentine soybean harvest at 43 million tonnes, down 4.4 per cent from a month ago.

The trade believes the USDA will come in around 141.6 million tonnes of soybeans for Brazil and 48.2 million for Argentina.

ANEC has projected Brazil’s soybean exports in January to reach 4.2 million tonnes, about 80 times more than a year ago.

CORN futures were also slightly higher on Tuesday, in concert with soybeans.

Prior the S&D report, the market foresees the USDA global corn ending stocks at 303.6 million tonnes, down 0.7 per cent. Domestic stocks as of Dec. 1 are projected at 11.61 billion bushels.

CONAB cut 3.6 per cent off of its forecast for Brazil’s corn crop to 112.9 million tonnes. That still far exceeds last year’s drought and frost stricken crop of 87 million tonnes.

Cordonnier pegged Brazil corn production to be 112 million tonnes, down 0.9 per cent from last month. He placed Argentina at 51 million tonnes, for a cut of 1.9 per cent.

ANEC forecast Brazil’s January corn exports to hit 2.6 million tonnes, for a 23.8 per cent spike from the same time last year.

China announced it will maintain its tariffs on U.S. dried distillers grains (DDG’s) imports for another year.

WHEAT futures were stronger on Tuesday, with double-digit gains for Chicago and Minneapolis, and a modest increase for Chicago.

Ahead of tomorrow’s USDA winter wheat plantings report, the trade has projected an average increase of 2.1 per cent at 34.3 million acres.

Market expectations for tomorrow’s supply and demand report have called for an U.S. wheat carryout of 580 million to 648 million bushels. Global ending stocks are predicted to be around 287.7 million tonnes.

Domestic wheat stocks as of Dec. 1 are expected to be 1.32 billion to 1.68 billion bushels.

The Western Producer

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