By Glen Hallick, MarketsFarm
WINNIPEG, March 3 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts higher Tuesday, building on gains made Monday, albeit at a slower pace.
Chicago soyoil and European rapeseed were higher today, while Malaysian palm oil was flat.
The gains in the North American commodities came as the United States Federal Reserve made a rare emergency rate cut earlier today. The Fed dropped its key interest rate by a half-point to help spur U.S. economic growth.
Prior to the rate cut, the finance ministers and the heads of the central banks for the G-7 discussed the effects of the coronavirus in a teleconference. The belief is the coronavirus will push global economic growth lower from 2.9 per cent to 2.4 per cent this year.
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By mid-afternoon Tuesday, the Canadian dollar was down a tenth of a cent at 74.77 U.S. cents.
There were 20,058 contracts traded on Tuesday, which compares with Monday when 18,048 contracts changed hands. Spreading accounted for 9,200 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola May 466.60 up 3.60
Jul 474.00 up 3.40
Nov 482.80 up 2.60
Jan 489.30 up 2.40
SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly higher on Tuesday, with buyers resurfacing in the market.
The finance ministers and the heads of the central banks from the G-7 discussed the effects of the COVID-19 coronavirus on the global economy in a teleconference on Tuesday. They agreed to take “appropriate measures” to bolster the global economy that the Organization for Economic Co-Operation and Development (OECD) said it’s to drop from 2.9 to 2.4 per cent growth. Shortly after the call, the United States Federal reserve cut its key interest rate by a half-point to help continue U.S. economic growth.
The U.S. Department of Agriculture (USDA) reported yesterday that 5.14 million tonnes of soybeans were crushed in January, which was an all-time record. The crush produced about 4.14 million tonnes of soymeal and around 977,000 tonnes of soyoil.
Dr. Michael Cordonnier of Soybean and Corn Advisor kept his forecast for soybean production in Brazil and Argentina at 125 million and 54 million tonnes respectively.
Malaysian palm oil saw increases after a new prime minister was sworn in and demand China from picked up. The previous PM was highly critical of India’s controversial new citizenship law, said to be discriminatory towards Muslims. India halted its palm oil imports from Malaysia and prices tumbled, only to be exacerbated by decreased demand from China due to the coronavirus.
CORN futures were higher on Tuesday, taking its cue from soybeans.
Corn planting is underway in Texas with approximately 12 per cent of the crop in the ground as of Monday, according to the USDA. That’s double the five-year average.
Cordonnier maintained his forecast for Brazil and Argentina corn production at 100 million and 49 million tonnes respectively.
WHEAT futures were steady to higher on Tuesday, as Kansas City was up a half cent while Chicago and Minneapolis made stronger gains.
The USDA reported on Monday that the winter wheat crop in Kansas was in 43 per cent good to excellent condition, up eight points from the previous week. In Texas, winter wheat rated 36 per cent good to excellent, an increase of five points from the previous week.
The Australian Bureau of Agricultural and Resource Economics (ABARES) forecast the country’s wheat crop to increase by more than 40 per cent in 2020 due to rainfall that ended several years of drought. Farmers there are set to plant about 29.7 million acres, an increase of almost 19 per cent. Production is to exceed 21 million tonnes, which would be a sharp improvement over the less than 16 million tonnes harvested the previous year.
APK-Inform said farmers in Ukraine are likely to replant up to 11 per cent of their wheat crop due to unfavourable conditions. They are still expected to plant at total of 17.3 million acres of wheat this year, which would be 200,000 less than in 2019.
