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Weak Cdn $ a boost to canola

ICE Futures canola contracts were stronger on Wednesday, as weakness in the Canadian dollar provided support.

The Bank of Canada kept its key overnight interest rate unchanged at 1.75 per cent on Wednesday while lowering its expectations for future rate hikes in the accompanying statement. The Canadian dollar lost two-thirds of a cent relative to its United States counterpart as a result and hit its weakest levels in 18 months, which was supportive for canola crush margins.

However, uncertainty in the U.S. soybean market kept some caution in canola, with market participants still waiting for any concrete export news to come from the tentative trade truce between the U.S. and China.

Statistics Canada releases its updated production estimates on Thursday, and positioning ahead of that report was another feature.

About 27,704 canola contracts traded, which compares with Tuesday when 37,334 contracts changed hands. Spreading accounted for 20,846 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade held onto small gains on Wednesday, although activity was choppy.

While the latest trade developments between the United States and China brought some optimism back to the soy market, there have still been no actual reports of fresh U.S. soybean sales.
Expectations for large South American crops also weighed on prices.

Brazil’s soybean crop is estimated at anywhere from 123 million to 130 million tonnes by consultancy agency Celeres. That would be a new record, and well above the U.S. Department of Agriculture’s current estimate of 120.5 million.

The USDA releases its own updated world supply/demand estimates on Dec. 11, and pre-report positioning was a factor.

U.S. equity markets were closed Wednesday for a day of mourning for former President George H.W. Bush, limiting the activity in the commodity markets to some extent.

CORN futures were steady to slightly lower, lacking any clear direction. While the firm tone in soybeans provided some spillover support, losses in wheat weighed on corn and helped keep the grain trading in a narrow range.

Brazil’s corn crop is also expected to be larger on the year, with exports out of the country already running well ahead of the previous year.

WHEAT futures were lower on Wednesday, as prices continued to back away from their recent gains.

While U.S. wheat is thought to be looking more competitively priced on the world market, the country continues to miss out on export business.

In addition, a recent sale to Egypt was facing some questions, as Egypt has not issued letters of credit for a number of cargoes – effectively delaying payment.

OUTSIDE MARKETS

Light crude oil nearby futures in New York was down 36 cents at US$52.89 per barrel.

In the afternoon, the Canadian dollar was trading around US74.89 cents, down from 75.65 cents the previous trading day. The U.S. dollar was C$1.3353.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola Jan 19 484.70s +2.30 +0.48%

Canola Mar 19 492.00s +2.00 +0.41%

Canola May 19 499.50s +1.80 +0.36%

Canola Jul 19 506.00s +1.90 +0.38%

Canola Nov 19 498.00s +0.80 +0.16%

 

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 Jan 19 913-4s +1-6 +0.19%

Soybeans Mar 19 925-4s +1-6 +0.19%

Soybeans May 19 938-2s +1-2 +0.13%

Soybeans Jul 19 950-2s +1-4 +0.16%

Soybeans Aug 19 954-2s +1-4 +0.16%

 

Soybean Meal Dec 18 311.9s -0.8 -0.26%

Soybean Meal Jan 19 313.9s -0.8 -0.25%

Soybean Meal Mar 19 317.1s -0.4 -0.13%

 

Soybean Oil Dec 18 28.57s -0.07 -0.24%

Soybean Oil Jan 19 28.84s -0.06 -0.21%

Soybean Oil Mar 19 29.05s -0.06 -0.21%

 

Corn Dec 18 374-2s unch unch

Corn Mar 19 384-2s -0-4 -0.13%

Corn May 19 391-2s -0-2 -0.06%

Corn Jul 19 397-4s -0-6 -0.19%

Corn Sep 19 398-2s -0-6 -0.19%

 

Oats Dec 18 281-0s -2-4 -0.88%

Oats Mar 19 287-6s -2-4 -0.86%

Oats May 19 289-2s -2-2 -0.77%

Oats Jul 19 282-6s -2-2 -0.79%

Oats Sep 19 270-0s -4-4 -1.64%

 

Wheat Dec 18 514-4s -4-6 -0.91%

Wheat Mar 19 518-0s -4-4 -0.86%

Wheat May 19 523-2s -4-4 -0.85%

Wheat Jul 19 527-6s -5-0 -0.94%

Wheat Sep 19 536-0s -5-0 -0.92%

 

Minneapolis

Spring Wheat Dec 18 584-2s -3-4 -0.60%

Spring Wheat Mar 19 575-4s -4-2 -0.73%

Spring Wheat May 19 579-4s -4-4 -0.77%

Spring Wheat Jul 19 585-0s -4-6 -0.81%

Spring Wheat Sep 19 591-6s -4-6 -0.80%

 

Kansas City

Hard Red Wheat Dec 18 476-4s -7-2 -1.50%

Hard Red Wheat Mar 19 498-0s -7-2 -1.43%

Hard Red Wheat May 19 509-6s -7-2 -1.40%

Hard Red Wheat Jul 19 519-4s -7-4 -1.42%

Hard Red Wheat Sep 19 532-2s -7-0 -1.30%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Dec 18 118.300s +0.525 +0.45%

Live Cattle Feb 19 122.375s +0.725 +0.60%

Live Cattle Apr 19 123.875s +0.975 +0.79%

 

Feeder Cattle Jan 19 145.475s +1.075 +0.74%

Feeder Cattle Mar 19 143.050s +1.200 +0.85%

Feeder Cattle Apr 19 143.875s +0.975 +0.68%

 

Lean Hogs Dec 18 55.850s -1.025 -1.80%

Lean Hogs Feb 19 67.750s +1.700 +2.57%

Lean Hogs Apr 19 72.125s +1.375 +1.94%

 

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By Phil Franz-Warkentin Commodity News Service Canada's recent articles

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