North American Grain and Oilseed Review: An about-face for new crop canola

By Glen Hallick, MarketsFarm

WINNIPEG, June 21 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures saw the new crop contracts go from losses to gains on Monday. After dropping to the daily limit earlier in the session, old crop July recovered half of its losses.

Support came from increases in Chicago soybeans and soyoil, along with gains in European rapeseed. Small declines in Chicago soymeal and Malaysian palm oil provided some pressure.

Dry conditions across much of the Prairies were again posing a major threat to already struggling crops. There is virtually no rain in the forecast this week across the region.

At mid-afternoon the Canadian dollar was stronger and tempering further gains in canola. The loonie was at 80.91 U.S. cents compared to Friday’s close of 80.52.

The monthly supply and demand reports from Agriculture and Agri-Food Canada, released late Friday afternoon showed no changes to the endings stocks for old and new crop canola. The carryovers remained at 700,000 for 2020/21 and 750,000 for 2021/22. Those are significantly lower than the 2019/20 carryout of 3.13 million tonnes.

There were 20,382 contracts traded on Monday, which compares with Friday when 23,056 contracts changed hands. Spreading accounted for 7,266 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 748.10 dn 15.00
Nov 700.20 up 6.20
Jan 702.30 up 8.60
Mar 700.50 up 9.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Monday, as the trade remained concerned about the dryness in the major growing areas.

The U.S. Department of Agriculture announced two private sales of soybeans. One was for 336,000 tonnes to China and the other was for 120,000 tonnes to unknown destinations. Delivery for both is to be during the upcoming market year.

Ahead of the weekly crop progress report later this afternoon, the trade expects soybean conditions to fall below 60 per cent good to excellent. Soybean planting is projected to be virtually complete.

The battle over waivers from the Renewable Fuel Standard is heating up with U.S. President Joe Biden caught in between support from the soybean sector to keep the waivers and opposition to them from the corn sector.

Rabobank bumped up its call on Brazil soybean production for 2020/21 by one million tonnes to now 137 million.

CORN futures were lower on Monday, as the market took a different view regarding the weather.

Rain over the U.S. Corn Belt brought varied amounts moisture on the weekend. The southern areas tended to receive more precipitation than other parts of the region.

The trade pegged U.S. corn conditions to be under 65 per cent good to excellent.

Rabobank slashed its call on Brazil corn production for 2020/21 lopping off almost 15 per cent at 89.5 million tonnes. Rabobank joins a growing number of estimates that are now well below 95 million tonnes.

WHEAT futures were mixed on Monday, with gains for Minneapolis and declines for Chicago and Kansas City.

Severe drought continued to plague struggling crops across the U.S. Northern Plains, with reports of the driest conditions on record in some states, such as North Dakota.

Market expectations called for winter wheat conditions to hold at 48 per cent good to excellent and for spring wheat conditions to slip under 35 per cent. The winter wheat harvest is projected to have made good progress since last week.

Futures Prices as of June 21, 2021

Canola
Price Change
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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