By Glen Hallick, MarketsFarm
WINNIPEG (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower on Friday, due to spillover from declines in the Chicago soy complex. However, canola and Chicago soyoil backed away from sharper losses earlier in the session. Additional pressure came from losses in European rapeseed and Malaysian palm oil.
On the flip side, tight canola supplies continued to underpin values, as were concerns over the drought extending through the winter to seeding time in the spring.
A trader cautioned that the enormous long position held by spec funds could lead to sharp losses in canola should soyoil continue to fall.
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He also noted that canola needed to become expensive as to deter export demand. That price rationing has been effective with exports down by half of what they were a year ago. The Canadian Grain Commission reported those exports were at 1.56 million tonnes after 13 weeks into the 2021/22 marketing year.
At mid-afternoon the Canadian dollar was relatively steady, with the loonie at 80.28 U.S. cents, compared to Thursday’s close of 80.33.
A reminder to set your clocks back one hour, where applicable on Sunday, with the end of Daylight Savings Time.
There were 20,752 contracts traded on Friday, which compares with Thursday when 18,638 contracts changed hands. Spreading accounted for 11,596 contracts traded.
SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Friday, ahead of the supply and demand estimates from the United States Department of Agriculture (USDA).
The report is set to be released on Nov. 9 at 11 am Central. The average trade guess for 2021/22 U.S. soybean production is just short of 122 million tonnes, up by around 941,700 tonnes from October’s estimate. As for the 2021/22 global soybean ending stocks, expectations are for those to rise by 1.1 million tonnes at 105.6 million tonnes.
There’s growing concerns in the trade towards China not fulfilling its obligations as outlined in the Phase One trade agreement. Exports out of the U.S. have been down significantly this year after hitting record highs in 2020.
The USDA attaché in China raised the amount of soybean imports to the country in 2020/21 to 99.76 million tonnes from 99 million. The attaché has maintained the department’s estimate of China’s 2021/22 soybean imports at 101 million tonnes.
The Buenos Aires Grain Exchange (BAGE) reported a little more than seven per cent of Argentina’s 2021/22 soybean crop has been planted. That’s almost 2.5 points behind the average pace as dry conditions were posing a challenge. However, the country received rain which improved moisture levels.
CORN futures were lower on Friday, caught up in spillover from soybeans.
Above normal temperatures remain forecast for much of the U.S. through the weekend, with very little prospect of precipitation.
Trade expectations for Tuesday place 2021/22 U.S. corn production at an average of 382.29 million tonnes, up 787,400 tonnes from last month.
The BAGE said corn planting in Argentina, for the week ended Nov. 4, was at 28.4 per cent complete, advancing only 0.8 per cent due to rain.
Ukraine said its corn harvest has slowed at 44 per cent complete because of sharply higher gas prices. Also for next year, expectations are for 10 to 15 per cent less acres being planted with corn due to increased input costs.
WHEAT futures were lower on Friday, as U.S. wheat prices remain globally uncompetitive, despite recent pull backs.
Low wheat supplies across the Middle East and North Africa have been reported.
The average trade guess for U.S. wheat ending stocks is 15.84 million tonnes, up 51,700 tonnes from October.
France reported that 80 per cent of its soft wheat crop was planted as of Nov. 1, with 26 per cent of its durum in the ground.
The wheat crop in Argentina isn’t expected to benefit from recent rainfall as it’s too far along in its development.
