ICE Canada canola futures fall as U.S. soy slides on USDA data

(Reuters) — ICE Canada canola futures closed lower on Thursday, following a three percent drop in U.S. soybean futures after the U.S. Department of Agriculture’s U.S. soy yield estimate came in above trade expectations.

November canola fell $5 to settle at $506.20 per tonne, halting a three-session rally, and January canola  ended down $5.30 at $511.20.

Volume totalled 19,719 contracts, the most in a month.

NYSE MATIF November rapeseed  fell 0.87 percent while Malaysian October palm oil rose 1.25 percent.

The Canadian dollar was trading at $1.2722 to the U.S. dollar, or US78.60 cents at 2:28 p.m. CDT.

U.S. soybean and corn futures tumbled more than three percent after the USDA’s yield and production forecasts for both crops came in above trade expectations.

Wheat futures also fell on a larger-than-expected crop forecast for U.S. spring wheat despite drought in the northern Plains crop belt.

Chicago Board of Trade November soybean futures settled down 33 cents at $9.40-1/4 per bushel after hitting $9.38-1/2, the contract’s lowest since June 30.

CBOT December corn ended down 15-1/4 cents at $3.71 per bushel after touching $3.70-1/4, its lowest since Sept. 30.

The USDA projected the U.S. corn yield at 169.5 bushels per acre, below its previous forecast of 170.7 but above an average of trade estimates for 166.2 bushels per acre.

For soybeans, the USDA put the yield at 49.4 bushels per acre, above its previous forecast of 48.0, surprising analysts who expected a reduction.

Both figures implied larger harvests than most analysts expected, given planting delays and dry conditions in parts of the Midwest.

“They (USDA’s yield estimates) are, I would say, shockingly bearish. They caught the trade leaning the wrong way. They caught the funds leaning the wrong way,” said Don Roose, president of U.S. Commodities.

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“The biggest issue is the rise in soybean yield, and no doubt there will be adjustments down the road,” said Rich Nelson, chief strategist at Allendale Inc.

Others noted that U.S. crop weather has improved in August, the most important month for determining soybean yields.

“Though not quite to the record of 2016-17, this still could be a huge (soybean) crop, especially with such large acreage,” Alex Norton of Beeson & Associates wrote in a client note.

CBOT wheat futures fell about four percent, with the September contract down 19 cents at $4.40-1/2 per bushel, after the USDA’s estimate of the U.S. spring wheat crop topped trade expectations..

MGEX December spring wheat fell 30 cents to $7.15-1/2 after hitting $7.15, its lowest since June 29.

The USDA estimated U.S. production of spring wheat other than durum at 402 million bushels, down from 423 million in July but well above the average trade estimate of 393 million.

“Given the disaster spring wheat crop and horrible conditions, this modest decline was a surprise to traders,” Norton said.

Light crude oil nearby futures in New York were down 97 cents US$48.59 per barrel.

In the afternoon, the Canadian dollar was trading around US78.49 cents, down from 78.73 cents the previous trading day. The U.S. dollar was C$1.2740.

Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 17   506.20s   -5.00   -0.98%
Canola Jan 18   511.20s   -5.30   -1.03%
Canola Mar 18   514.90s   -5.30   -1.02%
Canola May 18   517.10s   -4.50   -0.86%
Canola Jul 18   518.60s   -4.80   -0.92%

Milling Wheat Oct 17   277.00s   -8.00   -2.81%
Milling Wheat Dec 17   280.00s   -8.00   -2.78%
Milling Wheat Mar 18   285.00s   -7.00   -2.40%

Durum Wheat Oct 17   320.00s   +7.00   +2.24%
Durum Wheat Dec 17   321.00s   +7.00   +2.23%
Durum Wheat Mar 18   296.00s   +1.00   +0.34%

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Barley Oct 17   145.00s   unch   unch
Barley Dec 17   141.00s   unch   unch
Barley Mar 18   141.00s   unch   unch

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound. Prices are displayed with fractions (2/8, 4/8, and 6/8) instead of decimals. -2 equals .25, -4 equals .50, -6 equals .75. The “s” means it is the settlement.

Chicago
Soybeans Aug 17   930-6s   -32-2   -3.35%
Soybeans Sep 17   934-0s   -32-0   -3.31%
Soybeans Nov 17   940-2s   -33-0   -3.39%
Soybeans Jan 18   949-0s   -32-4   -3.31%
Soybeans Mar 18   956-6s   -31-6   -3.21%

Soybean Meal Aug 17   294.2s   -12.4   -4.04%
Soybean Meal Sep 17   295.8s   -12.5   -4.05%
Soybean Meal Oct 17   297.5s   -12.5   -4.03%

Soybean Oil Aug 17   33.74s   -0.39   -1.14%
Soybean Oil Sep 17   33.79s   -0.40   -1.17%
Soybean Oil Oct 17   33.91s   -0.39   -1.14%

Corn Sep 17   357-2s   -15-0   -4.03%
Corn Dec 17   371-0s   -15-2   -3.95%
Corn Mar 18   383-0s   -15-0   -3.77%
Corn May 18   389-2s   -14-4   -3.59%
Corn Jul 18   394-4s   -14-2   -3.49%

Oats Sep 17   266-0s   -4-4   -1.66%
Oats Dec 17   267-0s   -8-4   -3.09%
Oats Mar 18   270-6s   -7-4   -2.70%
Oats May 18   272-2s   -7-6   -2.77%
Oats Jul 18   273-6s   -7-4   -2.67%

Wheat Sep 17   440-4s   -19-0   -4.13%
Wheat Dec 17   468-6s   -18-0   -3.70%
Wheat Mar 18   490-2s   -17-2   -3.40%
Wheat May 18   505-2s   -16-6   -3.21%
Wheat Jul 18   514-2s   -16-4   -3.11%

Minneapolis
Spring Wheat Sep 17   703-2s   -30-6   -4.19%
Spring Wheat Dec 17   715-4s   -30-0   -4.02%
Spring Wheat Mar 18   715-2s   -28-2   -3.80%
Spring Wheat May 18   703-2s   -25-2   -3.47%
Spring Wheat Jul 18   691-4s   -23-2   -3.25%

Kansas City
Hard Red Wheat Sep 17   448-2s   -15-4   -3.34%
Hard Red Wheat Dec 17   475-6s   -15-2   -3.11%
Hard Red Wheat Mar 18   493-6s   -15-2   -3.00%
Hard Red Wheat May 18   507-6s   -14-4   -2.78%
Hard Red Wheat Jul 18   523-0s   -14-4   -2.70%

Chicago livestock futures in US¢/pound, Pit trade
Live Cattle  Aug 17   108.850s   -1.150   -1.05%
Live Cattle  Oct 17   106.600s   -1.450   -1.34%
Live Cattle  Dec 17   108.600s   -1.275   -1.16%

Feeder Cattle  Aug 17   141.175s   -0.350   -0.25%
Feeder Cattle  Sep 17   141.300s   -0.850   -0.60%
Feeder Cattle  Oct 17   140.475s   -0.500   -0.35%

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Lean Hogs  Aug 17   84.450s   +0.325   +0.39%
Lean Hogs  Oct 17   67.975s   -0.275   -0.40%
Lean Hogs  Dec 17   62.700s   -0.250   -0.40%