North American Grain and Oilseed Review: Sharp gains for old crop canola

Intercontinental Exchange (ICE) canola futures closed higher on Thursday, with the strongest gains in the front months. The rolling out of the January contract was a feature.

There was ample support from significant upticks in European rapeseed and the Chicago soy complex. Moderate declines in Malaysian palm oil attempted to cool further increases.

Spillover from global crude oil prices underpinned edible oil values, including canola. However, crude was especially swingy in trading today, which affected edible oils.

Canadian National Rail said it will reopen its Kamloops to Vancouver corridor over the weekend. Another round of heavy rains for southern British Columbia forced CN to close its line a second time. Also, the railway began diverting some of its trains to Prince Rupert to help alleviate its backlog.

Statistics Canada is set to issue its principal field crops report on Friday morning. The trade largely expects to see declines in production for canola, wheat and other major grains. Regardless of the report, canola supplies will remain tight and continue to underpin values for the foreseeable future.

At mid-afternoon the Canadian dollar was lower, with the loonie at 78.04 U.S. cents, compared to Wednesday’s close of 78.27.

There were 18,282 contracts traded on Thursday, which compares with Wednesday when 19,346 contracts changed hands. Spreading accounted for 10,758 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,022.60 up 28.30
Mar 985.10 up 17.80
May 941.50 up 11.30
Jul 891.50 up 7.10

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Thursday, as the market was spurred on by significant gains in the United States wheat complex.

The U.S. Department of Agriculture (USDA) reported weekly export sales of old crop soybeans exceeded 1.08 million tonnes for the week ended Nov. 25. That’s down 32 per cent from the week previous week and about mid-range for trade expectations. Export sales of soymeal fell 25.7 per cent at 175,800 tonnes, while those for soyoil were up 33.6 per cent at 68,400 tonnes.

The USDA announced two private sales of soybeans, with 164,100 tonnes to China and 130,000 tonnes to unknown destinations. Delivery of both is to be during the current marketing year.

The department is scheduled to release its monthly supply and demand estimates on Dec. 9. The trade is expecting a higher soybean carryout for 2021/22 due to reduced U.S. exports, especially those to China.

CORN futures were higher on Thursday, getting some spillover from the rest of the grain market.

The USDA reported corn export sales of more than 1.2 million tonnes, falling 21.2 per cent from the previous week, but towards the high end of market guesses.

Ahead of the next USDA report, market expectations are pointing to a cut in corn ending stocks for 2021/22 of 100 million to 200 million bushels.

Dry weather in South America due to a La Nina has increased market concerns over corn crops in Brazil and Argentina.

WHEAT futures were stronger on Thursday, due to increased global purchases.

Despite that, U.S. wheat export sales fell 83.8 per cent on the week at 99,000 tonnes and were far below trade projections.

Statistics Canada is scheduled to issue its principal crop report tomorrow morning. Most market expectations point towards the country’s wheat crop to be under the federal agency’s previous projection of 21.7 million tonnes.

Australia is forecast to have a two-week period of drier weather, which will aid the country’s otherwise soggy wheat harvest. So far, 40 per cent of the crop has been combined.

The Western Producer

Tags: soybean futures, corn futures, palm oil, canola futures, wheat futures, gains