North American Grain and Oilseed Review: Surge in wheat spills over into veg oils

Intercontinental Exchange (ICE) canola futures were higher on Friday, benefitting from increases in vegetable oils.

The upticks in veg oils were due to spillover from a surge in wheat prices caused by Russian pulling out of the agreement to allow Ukraine to export grain from its war-torn ports. Without producing any evidence, Russia accused Ukraine of launching drone strikes on the Black Sea fleet based at Sevastopol. The United Nations and Turkey, who brokered the deal, warned Russia not to attack any of the commercial vessels traveling to and from Ukrainian ports.

Gains in veg oils were tempered by declines in global crude oil prices, due to weakening demand.

The Prairies are forecast to see above normal temperatures with little chance of precipitation through to Tuesday. Come Wednesday, that’s expected to change dramatically.

The Canadian dollar was slightly lower at mid-afternoon as the loonie dipped to 73.37 U.S. cents, compared to Friday’s close of 73.45.

There were 33,909 contracts traded on Monday, which compares with Friday when 22,495 contracts changed hands. Spreading accounted for 24,666 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 879.00 up 14.90
Mar 884.60 up 15.20
May 890.30 up 16.20
Jul 893.00 up 17.10

WHEAT futures at the Chicago Board of Trade (CBOT) surged upward on Monday, after Russia withdrew from the grain export deal with Ukraine.

The agreement was brokered by the United Nations and Turkey, which allowed Ukraine to export grain out of its war-torn ports. The UN indicated it will try to revive the agreement and the forthcoming negotiations. Also, the UN and Turkey warned Russia not to attack any of the commercial vessels traveling to and from Ukrainian ports.

The United States Department of Agriculture (USDA) published its export inspections report and for the week ended Oct. 27, wheat inspections were 137,082 tonnes, edging up 2.8 per cent from the previous week.

The National Oceanic and Atmospheric Administration (NOAA) has forecast above normal precipitation for much of the wheat growing areas of the U.S.

IKAR projected 2022/23 Russian wheat production to be 101 million tonnes with almost half for export.

The Buenos Aires Grain Exchange (BAGE) forecast 2022/23 wheat production in Argentina at 15.2 million tonnes.

SOYBEAN futures were stronger on Monday, due to spillover from wheat.

Outbound movements of U.S. soybeans exceeded to 2.57 million tonnes. That’s down 11.8 per cent from the previous week. Year-to-date inspections tally 10.2 million tonnes, which is 9.5 per cent behind the same point last year.

Ahead of tomorrow’s USDA fats and oils report the trade predicted the September soybean crush to be just short of 168 million bushels. Soyoil stocks are expected to be close to 1.98 billion pounds.

CORN futures were higher on Monday, getting support from wheat and soybeans.

Export inspections of U.S. corn were down 10.6 per cent at 422,288 tonnes. The year-to-date reached 4.19 million tonnes but are 23.4 per cent lower than a year ago.

The September U.S. corn crush is projected to come in at more than 394 million bushels.

The European Commission chopped 600,000 tonnes from its call on 2022/23 corn production now at 54.9 million tonnes.

The BAGE placed corn planting in Argentina at 22 per cent complete.

Mexico announced late last week that it will ban genetically modified corn as of 2024, with plans to slash imports from the U.S. by half. That reduction is expected to be made up with increased domestic production.

Tags: corn, ports, vegetable oils, agreement, export, grain, canola, prices, soybean, wheat, forecast, Black Sea, Ukraine, futures