Record canola stocks affects futures

WINNIPEG – Intercontinental Exchange Futures canola contracts were down slightly on Wednesday, after being up for most of the session. Bids fell in the final 30 minutes of trading, which ended a rally that began yesterday.

At one point on Wednesday, the July contract reached a high of C$444.90 per tonne, but ended the day at C$438.50 per tonne.
Weighing on bids were weaker soybean prices on the Chicago Board of Trade, the strong potential for increased soybean acres in the United States and South America’s large soybean harvest.

Added to that are record levels for Canadian canola stocks for March at more than 10 million tonnes, according to Statistics Canada. Of the stocks, about 88 percent of canola remains in farmers’ bins.

At the World Trade Organization on Tuesday, Canada demanded China produce its evidence that canola shipments from Richardson International and Viterra were contaminated. China has yet to respond to Canada’s request to send a scientific delegation to discuss the matter.

Canada’s demand did provide something of a psychological bounce, as did a seeding rally on Wednesday.

Cool, wet weather has slowed spring planting across Canada, and of what has been planted, very little has sprouted. If conditions fail to improve, there becomes the possibility for problems further down the road.

There were 17,285 contracts traded on Wednesday, which compares with Tuesday when 19,092 contracts changed hands.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 438.50 dn 0.80
Nov 451.40 unchanged
Jan 457.60 dn 0.20
Mar 463.40 dn 0.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Wednesday, as a dark cloud is hovering over United States/China trade talks.
Originally scheduled for today, high-level negotiations between the two economic superpowers now begin Thursday in Washington. Talks are expected to end either Friday or Saturday.

Following China’s attempt to change numerous provisions of the deal already agreed to, U.S. President Donald Trump stated he will hike tariffs on imports from China from 10 to 25 per cent on Friday.

In light of numerous reports of China’s demand for soybeans on the wane, the country’s imports actually increased in April. The reason being, a cut to China’s value-added tax that took effect on April 1. Several shipments were held off until the tax cut. In April, China imported well over 7.6 million tonnes of soybeans, up from the 6.9 million tonnes in March. However, China’s imports are expected to fall in May and June.

Ahead of the U.S. Department of Agriculture’s (USDA) monthly supply and demand report, the markets are expecting U.S. soybean production for the 2019/20 crop year to be 114.305 million tonnes.

For South America, USDA’s forecast is expected to call for soybean production in Brazil for the current crop year to be 117.0 million tonnes and Argentina’s crop to be a 55.710 million tonnes.

CORN futures were weaker on Wednesday also due to the uncertainty surrounding trade talks.

It’s expected the USDA will peg the 2019/20 U.S. corn crop at 376.800 million tonnes. For the current crop year, the USDA’s forecast for Brazil’s corn production to be 96.702 million tonnes and Argentina’s crop at 48.008 million tonnes.

U.S. ethanol production was up last week at 1.036 million barrels, slightly above the five-week average of 1.018 million barrels.

WHEAT futures were weaker on Wednesday, due to technical selling and large stocks both domestic and globally.

SovEcon kept its estimate for Russia’s wheat production for 2019 at 83.388 million tonnes.

The Philippines issued a tender for 54,431 tonnes of wheat that’s to be shipped between July and September.

Jordan reissued a previous tender for 120,000 tonnes of wheat.

South Korea purchased about 650,000 tonnes of feed wheat.

 

OUTSIDE MARKETS

Light crude oil nearby futures in New York was up 72 cents at US$62.12 per barrel.

In the afternoon, the Canadian dollar was trading around US74.26 cents, down from 74.21 cents the previous trading day. The U.S. dollar was C$1.3466.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola May 19 437.60s +1.90 +0.44%

Canola Jul 19 437.50s -0.80 -0.18%

Canola Nov 19 451.40s unch unch

Canola Jan 20 457.60s -0.20 -0.04%

Canola Mar 20 463.40s -0.20 -0.04%

 

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 19 814-2s -3-4 -0.43%

Soybean Jul 19 827-2s -3-4 -0.42%

Soybean Aug 19 833-4s -3-4 -0.42%

Soybean Sep 19 839-2s -3-2 -0.39%

Soybean Nov 19 850-4s -2-4 -0.29%

 

Soybean Meal May 19 288.7s +0.3 +0.10%

Soybean Meal Jul 19 292.9s -0.3 -0.10%

Soybean Meal Aug 19 294.6s -0.2 -0.07%

 

Soybean Oil May 19 26.71s -0.10 -0.37%

Soybean Oil Jul 19 27.00s -0.10 -0.37%

Soybean Oil Aug 19 27.14s -0.10 -0.37%

 

Corn May 19 355-2s -2-6 -0.77%

Corn Jul 19 364-2s -2-2 -0.61%

Corn Sep 19 372-2s -1-6 -0.47%

Corn Dec 19 382-2s -1-4 -0.39%

Corn Mar 20 395-0s -1-4 -0.38%

 

Oats May 19 295-0s -0-2 -0.08%

Oats Jul 19 278-4s -0-2 -0.09%

Oats Sep 19 268-2s +1-2 +0.47%

Oats Dec 19 259-4s +1-6 +0.68%

Oats Mar 20 257-6s +1-0 +0.39%

 

Wheat May 19 431-2s +0-6 +0.17%

Wheat Jul 19 439-0s -0-4 -0.11%

Wheat Sep 19 447-4s -0-4 -0.11%

Wheat Dec 19 461-2s -1-2 -0.27%

Wheat Mar 20 475-4s -2-2 -0.47%

 

Minneapolis

Spring Wheat May 19 508-2s -0-2 -0.05%

Spring Wheat Jul 19 520-4s -1-2 -0.24%

Spring Wheat Sep 19 529-0s -0-4 -0.09%

Spring Wheat Dec 19 542-0s -0-6 -0.14%

Spring Wheat Mar 20 555-4s -0-4 -0.09%

 

Kansas City

Hard Red Wheat May 19 394-2s -0-4 -0.13%

Hard Red Wheat Jul 19 403-4s -0-4 -0.12%

Hard Red Wheat Sep 19 414-2s -0-6 -0.18%

Hard Red Wheat Dec 19 434-4s -1-4 -0.34%

Hard Red Wheat Mar 20 454-4s -2-4 -0.55%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Jun 19 111.075s -1.200 -1.07%

Live Cattle Aug 19 107.400s -1.675 -1.54%

Live Cattle Oct 19 107.650s -1.800 -1.64%

 

Feeder Cattle May 19 135.775s -1.525 -1.11%

Feeder Cattle Aug 19 143.875s -1.725 -1.18%

Feeder Cattle Sep 19 144.850s -1.625 -1.11%

 

Lean Hogs May 19 83.575s +0.525 +0.63%

Lean Hogs Jun 19 88.550s -0.700 -0.78%

Lean Hogs Jul 19 90.750s -1.375 -1.49%

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