By Glen Hallick, MarketsFarm
WINNIPEG, March 4 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were mixed on Friday, with losses in the old crop months and gains in the new crop positions.
A trader commented that several countries are either scaling back or halting their biofuel blending requirements. Due to shortages, the oilseeds used for those biofuels are being redirected to food use.
Black Sea exports have dropped considerably due to the war in Ukraine and the growing economic sanctions slapped against Russia by the international community. That has generated some of the oilseed shortages, and especially wheat exports out of both countries.
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The trader said this has sent wheat prices skyrocketing, especially the nearby Chicago May contract. However he warned that once things begin to settle in Ukraine, that Chicago contract will careen downward, taking other grains and oilseeds down with it.
The Canadian dollar was lower at mid-afternoon, with the loonie at 78.51 U.S. cents, compared to Thursday’s close of 78.96.
There were 23,034 contracts traded on Friday, which compares with Thursday when 19,839 contracts changed hands. Spreading accounted for 9,494 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola May 1,074.80 dn 8.50
Jul 1,051.60 dn 4.40
Nov 895.00 up 4.90
Jan 893.30 up 4.10
SOYBEAN futures at the Chicago Board of Trade (CBOT) were mostly lower on Friday due to the Biden administration’s plans to reduce biofuel blending requirements.
The United States Department of Agriculture announced three private sales of soybeans. One sale is for 106,000 tonnes to China, another is for 108,860 tonnes to Mexico and the third is for 125,000 tonnes to unknown destinations. Delivery of the three is to be during the current marketing year.
The USDA is scheduled to issue its next supply and demand estimates on March 9 at 11 am Central. The trade has forecast no change to 2021/22 U.S. soybean ending stocks to a cut of 143 million bushels. The global carryover is projected to be cut by 4.2 million tonnes at 88.7 million.
Meanwhile, the markets have projected the USDA to slice two million tonnes off of its call on Argentina soybean production and 5.1 million to be cut from Brazil production.
Canola production in Australia is expected to exceed last year’s record harvest by 42.2 per cent at 6.4 million tonnes, according to the Australian Bureau of Agricultural and Resources Economics and Sciences.
CORN futures were higher on Friday, due to spillover from wheat.
The average trade guess has called for a 74 million-bushel trim to U.S. corn ending stocks, while the world corn carryout is set to lose 2.7 million tonnes.
Corn production in South America is expected to realize cuts of 1.4 million tonnes for Brazil and 2.1 million tonnes for Argentina.
Rain is forecast for southern Brazil and northern Argentina, but Paraguay and central Brazil are to remain dry.
WHEAT futures were stronger on Friday, with fourth lock limit gain for Chicago May, while increases for Kansas City and Minneapolis backed away from their limits.
As the Russian invasion of Ukraine continued, a war premium remained on wheat, with either country unable to export out of the Black Sea.
Ahead of the USDA report, the trade forecast the U.S. wheat carryover to range from a 10 million-bushel gain to a 79 million-bushel cut. Global wheat ending stocks are expected to be trimmed by 700,000 tonnes at 277.5 million tonnes.
