Canola futures drop after release of USDA report

WINNIPEG, (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts dropped on Thursday, likely due to short covering.

Bids remained steady until about an hour after the release of the United States Department of Agriculture’s October supply and demand report. With the report, Chicago soybeans finished steady to lower, with a small increase for soyoil and a significant drop for soymeal.

That USDA report pegged Canadian canola production at 19.5 million tonnes, for a drop of 600,000 tonnes from last month’s estimate.

The cold front that brought snow and freezing temperatures to the Prairies this week, has been dumping snow on Manitoba today. Depending on the location in the province, forecast amounts range from 20 to 50 centimetres.

“When you look at the weather here, and in the U.S., you wonder why the market isn’t skyrocketing?” said one perplexed analyst.

In Alberta and Saskatchewan the cold front has been replaced by drier conditions with temperatures in the mid-single digits.

The Canadian dollar was higher at mid-afternoon Thursday at 75.20 U.S. cents, after closing yesterday at 75.05.

There were 40,156 contracts traded on Thursday, which compares with Wednesday when 39,086 contracts changed hands. Spreading accounted for 35,308 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 459.50 dn 3.80
Jan 468.20 dn 3.60
Mar 476.90 dn 3.50
May 484.40 dn 3.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were steady to lower on Thursday following the release of the United States Department of Agriculture’s (USDA) supply and demand report for October. Bids had been prior to the release of the report.

In that report, the USDA cut U.S. soybean yields by one bushel per acre (BPA) to now 46.9 BPA. That lowered production by 83 million bushels to now 3.467 billion bushels. Also, ending stocks were revised to 460 million bushels with a cut of 180 million.

U.S./China trade talks began today in Washington with the possibility of a partial trade deal now on the table. China wants to U.S. to at least delay a five per cent tariff hike that’s currently scheduled to take effect on Oct. 15. The U.S. is reportedly set to offer a currency pact in return along with negotiations on core issues to be scheduled later on. President Donald Trump is scheduled to meet with China’s lead negotiator, Vice-Premier Liu Hu on Friday.

The USDA released its weekly export sales report on Thursday and soybean net sales amounted 2.09 million tonnes with more than 56 per cent purchased by China. The total sales were slightly above the top end of trade expectations.

Also in the export sales report, soymeal net sales came to 364,700 tonnes, which exceeded trade predictions. Soyoil net sales of 1,200 tonnes were well below market guesses.

This morning, the USDA announced a private sale of 398,000 tonnes of U.S. soybeans to China, which are to be delivered this marketing year.

CONAB has projected Brazil’s soybean production to increase from 115.03 million tonnes in 2018/19 to 120.39 million in 2019/20.

CORN futures dropped on Thursday, due the USDA’s estimates not being in line with trade expectations.

In the supply and demand report, the USDA upped its corn yields to 168.4 BPA, rather than cutting it as the markets predicted. Estimated production is projected to reach 13.78 billion bushels as harvested average was trimmed to 81.8 million acres.

Export sales of corn at 284,500 tonnes were far below market predictions, according to the USDA’s latest weekly report.

The USDA reported Brazil’s 2018/19 corn production hit a record 101.0 million tonnes, which was an increase of 23 per cent the previous year due to above average yields. This year’s estimate is for another crop of 101.0 million tonnes, but on more acres with normal yields.

Meanwhile in contrast, CONAB’s forecast said Brazil’s corn production is to slip from 100.05 million tonnes in 2018/19 to 98.39 million tonnes in 2019/20.

WHEAT futures were weaker on Thursday, also due to the supply and demand report.

The USDA increased its estimate for wheat ending stocks to 1.04 billion bushels, which is up by 29 million from September. Wheat production was lowered slightly to 1.96 billion bushels, with 28.5 per cent as spring wheat.

The USDA reported net sales of wheat amounted to 521,900 tonnes. That was a 59 per cent jump from the previous week and a 38 per cent above the four-week average.

 

OUTSIDE MARKETS

Light crude oil nearby futures in New York was up 96 cents at US$53.55 per barrel.

In the afternoon, the Canadian dollar was trading around US75.22 cents, down from 75.05 cents the previous trading day. The U.S. dollar was C$1.3294.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola Nov 19       459.50s        -3.80  -0.82%

Canola Jan 20        468.20s        -3.60  -0.76%

Canola Mar 20       476.90s        -3.50  -0.73%

Canola May 20       484.40s        -3.20  -0.66%

Canola Jul 20         490.00s        -3.10  -0.63%

 

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 Nov 19     923-4s          -0-2    -0.03%

Soybean Jan 20     937-4s          -0-4    -0.05%

Soybean Mar 20    949-4s          -0-2    -0.03%

Soybean May 20    959-0s          -0-4    -0.05%

Soybean Jul 20      968-4s          -0-2    -0.03%

 

Soybean Meal Oct 19        304.1s          -1.3    -0.43%

Soybean Meal Dec 19       307.8s          -1.9    -0.61%

Soybean Meal Jan 20       310.1s          -1.9    -0.61%

 

Soybean Oil Oct 19            29.70s          +0.07 +0.24%

Soybean Oil Dec 19           29.78s          +0.07 +0.24%

Soybean Oil Jan 20           30.01s          +0.07 +0.23%

 

Corn Dec 19            380-2s          -14-0 -3.55%

Corn Mar 20           391-4s          -14-0 -3.45%

Corn May 20           397-4s          -13-2 -3.23%

Corn Jul 20 402-2s          -12-2 -2.96%

Corn Sep 20            400-4s          -4-6    -1.17%

 

Oats Dec 19 285-6s          +1-2   +0.44%

Oats Mar 20            284-4s          unch  unch

Oats May 20            285-4s          +0-4   +0.18%

Oats Jul 20  286-2s          +1-0   +0.35%

Oats Sep 20 285-6s          -0-4    -0.17%

 

Wheat Dec 19         493-0s          -7-2    -1.45%

Wheat Mar 20        499-6s          -7-2    -1.43%

Wheat May 20        505-2s          -6-6    -1.32%

Wheat Jul 20          510-0s          -6-2    -1.21%

Wheat Sep 20          517-6s          -6-2    -1.19%

 

Minneapolis

Spring Wheat Dec 19       535-2s          -6-4    -1.20%

Spring Wheat Mar 20      549-0s          -6-4    -1.17%

Spring Wheat May 20      558-2s          -6-4    -1.15%

Spring Wheat Jul 20        565-6s          -6-6    -1.18%

Spring Wheat Sep 20        573-2s          -7-0    -1.21%

 

Kansas City

Hard Red Wheat Dec 19  403-2s          -10-0 -2.42%

Hard Red Wheat Mar 20 416-4s          -9-6    -2.29%

Hard Red Wheat May 20 427-0s          -9-2    -2.12%

Hard Red Wheat Jul 20   436-6s          -9-0    -2.02%

Hard Red Wheat Sep 20   447-4s          -8-6    -1.92%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle (Pit) Oct 19   108.725s     +0.250          +0.23%

Live Cattle (Pit) Dec 19  111.425s     +0.250          +0.22%

Live Cattle (Pit) Feb 20   117.275s     -0.025           -0.02%

 

Feeder Cattle (Pit) Oct 19           144.300s     -0.200           -0.14%

Feeder Cattle (Pit) Nov 19         144.125s     -0.125           -0.09%

Feeder Cattle (Pit) Jan 20          140.425s     +0.900          +0.65%

 

Lean Hogs (Pit) Oct 19    62.400s        -0.400           -0.64%

Lean Hogs (Pit) Dec 19   68.475s        -1.000           -1.44%

Lean Hogs (Pit) Feb 20   75.875s        -0.075           -0.10%

 

About the author

Markets at a glance

Copyright © 2019. All market data is provided by Barchart Market Data Solutions. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

explore

Stories from our other publications