North American Grain/Oilseed Review: Canola weakens, spreading a feature

The ICE Futures canola market retreated from overnight gains to end lower on Monday, with intermonth spreading a feature as participants were busy rolling their positions out of the nearby November contract.

Strength in the Canadian dollar, which was up sharply relative to its United States counterpart, accounted for some of the weakness in canola. Losses in European rapeseed futures and steady farmer deliveries into the commercial pipeline were also bearish.

However, gains in Chicago Board of Trade soyoil provided underlying support, as world vegetable oil markets reacted to a Russian attack on a Ukrainian sunflower oil storage facility. Wide crush margins and solid end user demand also helped limit the downside.

About 33,770 canola contracts traded on Monday, which compares with Friday when 31,024 contracts changed hands. Spreading accounted for 28,160 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade settled mixed on Monday, lacking any clear direction in choppy activity.

A Russian drone strike on a Ukrainian sunflower oil terminal accounted for some of the buying interest in soyoil that spilled into soybeans.

The United States Department of Agriculture reported weekly U.S. soybean export inspections of 1.88 million tonnes, which was nearly double what moved the previous week.

Monthly U.S. crush data from the National Oilseed Processors Association (NOPA) showed that 158.1 million bushels of soybeans were crushed in September, which came in below average trade guesses and marked the lowest monthly total since the same month a year ago.

Soyoil stocks tightened to 1.46 billion pounds – the tightest in two years.

Seasonal harvest pressure kept a lid on the upside in soybeans.

CORN was weaker on Monday, pressured by soft export data and the advancing harvest.

Weekly U.S. corn export inspections of only 448,000 tonnes were down slightly from the previous week, but less than half of what moved during the same week a year ago.

A slow start to corn seeding in Argentina was somewhat supportive, with dry conditions there cutting into production prospects.

WHEAT was mixed at the close, backing away from larger gains to start the day.

The ongoing conflict in Ukraine remained at the forefront of the wheat market. Ukraine’s agriculture ministry pegged this year’s wheat crop at 19.2 million tonnes, well off the 32.2 million harvested last year.

Winter wheat seeding for next year’s Ukrainian crop is expected to be down by at least 20 per cent on the year.

In the U.S., weather conditions should allow for good winter wheat seeding over the next week, although many areas remain too dry for germination.

Tags: corn, canola, Vegetable Oil, soybean, wheat, soyoil, rapeseed, futures, Market