By Glen Hallick, MarketsFarm
WINNIPEG, Oct. 30 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished slightly lower on Wednesday, after a session that had good amount of fluctuations either side of steady.
Some direction came from the Chicago soy complex, which finished lower, but was also switching between green and red throughout the day.
Pressure also came from the slowly proceeding Prairie harvest and from farmer selling. However, the delays to getting the crop in the bin have provided support.
An analyst noted canola has returned to being range-bound, similar to the situation during the summer. He expects bids to remain so at least until the New Year.
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The Canadian dollar was falling at mid-afternoon Wednesday to 75.85 U.S. cents, after closing Tuesday at 76.48.
There were 26,565 contracts traded on Wednesday, which compares with Tuesday when 24,382 contracts changed hands. Spreading accounted for 17,534 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Nov 449.90 dn 1.50
Jan 459.60 dn 1.10
Mar 469.00 dn 1.00
May 477.50 dn 1.00
SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Wednesday, looking for a clear direction.
United States/China trade talks on Phase 1 of their partial agreement hit a snag. China is reportedly balking at its promise to purchase US$50 billion in U.S. agricultural products. The deal was to be signed during the APEC conference in Santiago, Chile Nov. 16 to 17. However, the summit has now been cancelled due to mass demonstrations in Santiago. A spokesperson for the Trump administration said the signing of the deal could be moved to a different location.
As widely expected, the U.S. Federal Reserve cut its key interest rate by a quarter of a point, from 1.75 to 1.50 per cent. Following the announcement, the U.S. stock markets edged lower while the U.S. dollar gained strength.
Wet conditions have continued to delay the U.S. harvest with snow in the Western Corn Belt and Northern Plains and rain in the Eastern Corn Belt. The USDA reminded farmers to file a Notice of Loss with their insurance provider and to request more time to bring the crop in.
There is speculation the carryout for U.S. soybeans could dip under 400 million bushels, due to smaller production and stronger demand. The forecast carryout in the USDA’s October supply and demand report was estimated to 460 million bushels.
Rabobank estimated the combined effects of African swine fever in China and the U.S./China trade war has cost U.S. farmers approximately US$1.50 to US$2.50 on a bushel of soybeans, according to a FarmLead report.
The daily price limit on soybeans will change from 65 cents to 60 cents effective Nov. 1.
Ahead of tomorrow’s USDA weekly export sales report, market predictions are for soybean exports of 500,000 to 1.1 million tonnes. Expectations for soymeal are 100,000 to 250,000 tonnes and soyoil between zero to 24,000 tonnes.
CORN futures were higher on Wednesday, as more than half of this year’s harvest remains in the field with cold, wet weather on the way.
The U.S. Energy Information Administration stated ethanol production was up by more than 1 million barrels per days, as of Oct. 25. However, ethanol stocks were down by 265,000 barrels at nearly 21.1 million for a two-year low.
Trade predictions for corn exports were 400,000 to 600,000 tonnes.
The U.S. Environmental Protection Agency will host a public hearing today in Ann Arbor, Mich. to discuss the Trump administration’s biofuels plan for 2020. It’s expected that representatives the oil and corn industries will be quite vocal in their positions.
WHEAT futures were steady to lower on Wednesday in the face of stiff global competition.
A survey conducted by Bloomberg found U.S. farmers could be set to plant the fewest winter wheat acres in 110 years at 31.118 million. That would be down from the 31.159 million planted last year. The lowest on record was 29.196 million in 1909.
Market predictions for wheat export sales were 200,000 to 500,000 tonnes.
Russia has seen its wheat exports decline this year, in part due to a stronger ruble against the U.S. dollar. Exports were down 11 per cent behind last year while the price is 12 per cent higher.
The latest estimate for Australia’s 2019 wheat crop came in at 16.8 million tonnes, which would be a 10-year low. Drought has severely cut production estimates from the expected 19.0 million to 20.0 million tonnes.
