By Glen Hallick, MarketsFarm
WINNIPEG, Aug. 15 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures finished higher for a second session on Tuesday, with prices above the 200-day moving average.
Gains in Chicago soyoil, European rapeseed and Malaysian palm oil provided support for canola’s upswing. However, sharp declines in Chicago soybeans and soymeal held back the Canadian oilseed from climbing higher. Additional pressure came from decreases in global crude oil prices.
With the heat across much of the Prairies expected to break in a few days, a system will push a thunderstorm across the region, with rain for only the northern growing areas.
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Strong crush margins continued to underpin canola, with the nearby positions exceeding C$200 per tonne above futures.
The Canadian dollar was lower at mid-afternoon Tuesday, as the loonie dipped to 74.12 U.S. cents, compared to Monday’s close of 74.29.
There were 27,545 contracts traded on Tuesday, which compares with Monday when 28,583 contracts changed hands. Spreading accounted for 14,062 contracts traded.
Prices are in Canadian dollars per metric tonne:
Price Change Canola Nov 777.40 up 6.60 Jan 783.50 up 7.10 Mar 786.70 up 7.60 May 786.40 up 6.80
SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, buoyed by improved crop ratings. However, soyoil finished strong thanks to a large July crush.
The United States Department of Agriculture pegged soybean conditions at 59 per cent good to excellent, as of Aug. 13, for a gain of five points on the week.
The U.S. National Oilseed Processors Association reported the July soybean crush came in at 173.3 million bushels, two million above the average trade guess, and a new July record. Soyoil stocks tallied 1.54 billion pounds, compared to the average trade guess of 1.69 billion.
Barchart upped its call on U.S. soybean yields by 0.30 bushels per acre, now at 50.75. That raised its forecast on 2023/24 production to 4.39 billion bushels, above the USDA’s latest estimate of 4.21 billion.
Meanwhile, Dr. Michael Cordonnier of Soybean and Corn Advisor Inc. added a half bushel per acre to his yield estimate for U.S. soybeans at 51.0 bu./ac.
As expected with the coming El Nino, the weather outlook for Brazil has wet conditions from August to October in the south while the central region is to be drier than normal.
CORN futures were weaker on Tuesday, due to a favourable weather outlook for the U.S. Corn Belt.
U.S. corn was rated at 59 per cent good to excellent, inching up two points on the week.
Barchart projected corn yields of 177.90 bu./ac., down 0.46 from its previous estimate. Output was cut by 124 million bushels at 14.99 billion.
However, Cordonnier upped his estimate by one bushel per acre at 175.0 bu./ac.
WHEAT futures were also down hard on Tuesday, pulled lower by corn and a lack of fresh supportive news.
The U.S. winter wheat harvest was close to wrapping up at 92 per cent finished, gaining five points and equal with the average. Meanwhile the spring wheat harvest more than doubled to 24 per cent complete, four points back of the average. The spring wheat rated 42 per cent good to excellent, up one on the week.
The markets remained disinterested in maintaining a risk premium, as they pay little attention to latest developments in the Russia-Ukraine war.
IKAR increased its forecast for 2023/24 wheat production in Russia from 88.0 million to 89.5 million tonnes.
Egypt is set to receive a total of US$500 million from Al Dahra and the Abu Dhabi Exports Office over five years for the purchase of wheat. Egypt is the world’s largest wheat importer and is dealing with a foreign currency crunch.
