By Glen Hallick, MarketsFarm
Glacier Farm Media MarketsFarm – Intercontinental Exchange canola futures closed lower on Wednesday, giving up some of the gains made yesterday. However, canola poked above unchanged in choppy trading towards the end of the session before slipping back.
Support for canola came from upticks in Chicago soybeans and soymeal as well as Malaysian palm oil. Chicago soyoil was virtually unchanged, which provided little direction to the Canadian oilseed. Global crude oil prices fell back which weighed on vegetable oil values.
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An analyst said there has been some farmer selling on the idea prices are very likely to continue lower. He added there was some spec selling along with a limited amount of commercial buying. He noted the spreads are getting wider, indicating the market is well covered in the short term.
The Canadian dollar pushed upward at mid-afternoon Wednesday with the loonie at 74.67 U.S. cents compared to Tuesday’s close of 74.53.
There were 60,448 contracts traded on Wednesday, compared to Tuesday when 61,131 contracts changed hands. Spreading accounted for 44,904 contracts traded.
Prices are in Canadian dollars per metric tonne:
Price Change Canola Mar 610.40 dn 3.10 May 618.00 dn 1.70 Jul 622.30 dn 1.50 Nov 622.70 dn 0.80
SOYBEAN futures at the Chicago Board of Trade were higher on Wednesday, turning around from earlier losses despite weakness in crude oil prices.
Ahead of tomorrow’s fats and oils report from the United States Department of Agriculture, the trade projected the December soybean crush at 206.1 million bushels with soyoil stocks of 1.76 billion pounds.
The U.S. Federal Reserve kept its key interests rates at 5.25 to 5.5 per cent. The Fed said it will hold off on any rate cuts until later in the year.
The six to 10-day forecast based by the GFS model has called for rain for Argentina and southern Brazil with the latter’s Mato Grosso state turning drier. The Euro model for the same time period forecast rain for western Argentina and dryness in northeastern Brazil.
Consultancy AgResource cut its estimate of the Brazil soybean harvest from 150.7 million tonnes to now 145.4 million. A number of consultancies have reduced their projections to below 150 million tonnes after initial forecasts called for at least 160 million.
CORN futures were very narrowly mixed on Wednesday, caught between support from soybeans and pressure from wheat.
The U.S. Energy Information Administration reported ethanol production for the week ended Jan. 26 averaged 991,000 barrels per day. That was only the third time this marketing year that production average less than one million BPD. Ethanol stocks dropped to 24.3 million barrels.
The USDA attaché in Ukraine pegged that country’s 2023/24 corn exports at 29.2 million tonnes, up eight per cent from 2022/23. The USDA January supply and demand report placed those exports at 21 million tonnes.
WHEAT futures were lower on Wednesday, as export sales are expected to be sluggish in tomorrow’s report.
The USDA attaché in Ukraine projected the country’s 2023/24 wheat exports at 17.7 million tonnes, up three per cent from the previous year. The January S/D report placed them at 14 million tonnes.
The long range outlook for northwest India forecast above normal temperatures, which would likely harm the region’s wheat crop.
The Buenos Aires Grain Exchange placed this year’s Argentina wheat harvest at 15.1 million tonnes. While a 24 per cent improvement over last year, the estimate was three million tonnes below initial projections.
