Canola futures down again after trade dispute

WINNIPEG – Intercontinental Exchange (ICE) Futures canola contracts were down on Friday, with light volumes in trading.

The negative effects from United States/China trade talks were felt in the canola market today, with spillover from soybeans on the Chicago Board of Trade.

The July canola contract lost 90 cents at C$435.80 per tonne. The November contract was down C$1.40 at C$448.90 per tonne.

There some volatility for the market following the release of the U.S. Department of Agriculture’s World Agriculture Supply and Demand Estimates. A Winnipeg-based trader commented the markets like to use reports, such as these, as a trigger “to do some things” with prices.

The trader also said canola remains too expensive when compared to soybeans, and that will hurt the demand for canola in the long run. For the short term, it’s good for farmers as speculators are propping up prices.

As of May 5, total canola exports for the 2018/19 crop year have amounted to 7.18 million tonnes, according to the Canadian Grain Commission. That’s down from 7.99 million tonnes this time last year.

There were 10,599 contracts traded on Friday, which compares with Thursday when 12,297 contracts changed hands.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 435.80 dn 0.90
Nov 448.90 dn 1.40
Jan 455.30 dn 1.40
Mar 461.30 dn 0.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Friday, due to fallout from United States/China trade talks and a bearish WASDE report.

High-level negotiations resumed on Friday in Washington without reaching a deal. Talks were overshadowed by U.S. President Donald Trump having imposed tariff hikes on US$200 billion of Chinese imports. China stated is will take countermeasures, but didn’t specify as to what.

Trump is expected to speak with Chinese President Xi Jinping by phone in the near future to discuss trade. About a third of China’s exports are destined to the U.S.

Earlier today, Trump tweeted that revenues from the tariffs will be used to buy grains and oilseeds from U.S. farmers and to be used for humanitarian purposes.

The May WASDE report forecast U.S. soybean production for the 2019/20 crop year at 112.9 million tonnes, a decrease of nine per cent from the previous year. Ending stocks for the current crop year were projected to be 27.1 million tonnes.

China is looking to boost its domestic soybean production by eight per cent to 17.3 million tonnes for the 2019/20 crop year. With China’s demand for estimated to be 103.7 million tonnes, the country will still need to import nearly 83 per cent of its soybeans.

CORN futures were weaker on Friday, due to trade talks and the WASDE report.

The USDA has projected domestic corn production in 2019 to increase by four per cent to 381.8 million tonnes. Ending stocks for the current crop year were pegged at 53.2 million tonnes.

WHEAT futures were weaker on Friday, with Kansas City hard red wheat incurring the biggest losses. The July contract dropped 10.75 cents, with moderate losses at Chicago and a slight dip at Minneapolis.

The May WASDE projected the U.S. wheat crop at more than 31.0 million tonnes for the 2019/20 crop year, a slip of 1.2 per cent from the previous year.

FranceAgriMer stated the French soft wheat crop is in 79 per cent good to excellent condition.

The Ukrainian Ministry of Agriculture said the country’s wheat exports have reached 145.0 million tonnes for the current crop year.

 

 

OUTSIDE MARKETS

Light crude oil nearby futures in New York was down four cents at US$61.66 per barrel.

In the afternoon, the Canadian dollar was trading around US74.53 cents, up from 74.17 cents the previous trading day. The U.S. dollar was C$1.3418.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola May 19 435.30s -0.80 -0.18%

Canola Jul 19 435.80s -0.90 -0.21%

Canola Nov 19 448.90s -1.40 -0.31%

Canola Jan 20 455.30s -1.40 -0.31%

Canola Mar 20 461.30s -1.40 -0.30%

 

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

Soybean May 19 797-0s -3-2 -0.41%

Soybean Jul 19 809-2s -3-4 -0.43%

Soybean Aug 19 815-6s -3-6 -0.46%

Soybean Sep 19 821-4s -3-4 -0.42%

Soybean Nov 19 833-2s -2-4 -0.30%

 

Soybean Meal May 19 284.1s -1.2 -0.42%

Soybean Meal Jul 19 287.3s -1.8 -0.62%

Soybean Meal Aug 19 289.2s -1.8 -0.62%

 

Soybean Oil May 19 26.50s +0.16 +0.61%

Soybean Oil Jul 19 26.79s +0.16 +0.60%

Soybean Oil Aug 19 26.93s +0.16 +0.60%

 

Corn May 19 342-4s -2-0 -0.58%

Corn Jul 19 351-6s -1-4 -0.42%

Corn Sep 19 361-0s -1-0 -0.28%

Corn Dec 19 372-0s -0-6 -0.20%

Corn Mar 20 386-2s -0-4 -0.13%

 

Oats May 19 302-6s +4-2 +1.42%

Oats Jul 19 286-2s +4-2 +1.51%

Oats Sep 19 271-6s unch unch

Oats Dec 19 262-4s unch unch

Oats Mar 20 261-4s +0-2 +0.10%

 

Wheat May 19 419-0s -2-6 -0.65%

Wheat Jul 19 424-6s -4-6 -1.11%

Wheat Sep 19 433-6s -4-6 -1.08%

Wheat Dec 19 448-2s -4-4 -0.99%

Wheat Mar 20 463-0s -4-4 -0.96%

 

Minneapolis

Spring Wheat May 19 508-6s -1-2 -0.25%

Spring Wheat Jul 19 517-0s -0-2 -0.05%

Spring Wheat Sep 19 525-4s -0-2 -0.05%

Spring Wheat Dec 19 539-4s +0-2 +0.05%

Spring Wheat Mar 20 552-4s +0-2 +0.05%

 

Kansas City

Hard Red Wheat May 19 379-2s -10-6 -2.76%

Hard Red Wheat Jul 19 387-0s -10-6 -2.70%

Hard Red Wheat Sep 19 398-0s -10-4 -2.57%

Hard Red Wheat Dec 19 419-0s -9-6 -2.27%

Hard Red Wheat Mar 20 440-0s -8-6 -1.95%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Jun 19 112.450s +0.500 +0.45%

Live Cattle Aug 19 108.900s +1.300 +1.21%

Live Cattle Oct 19 109.025s +1.375 +1.28%

 

Feeder Cattle May 19 137.625s +1.375 +1.01%

Feeder Cattle Aug 19 146.825s +2.350 +1.63%

Feeder Cattle Sep 19 147.775s +2.500 +1.72%

 

Lean Hogs May 19 83.750s unch unch

Lean Hogs Jun 19 89.675s -0.325 -0.36%

Lean Hogs Jul 19 90.750s -0.225 -0.25%

 

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