North American Grain and Oilseed Review: Canola gains back some of Wednesday’s losses

By Glen Hallick, MarketsFarm

WINNIPEG, Aug. 6 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were steady to higher on Thursday, as technical and commercial buying provided support.

There were small gains in Chicago soyoil and European rapeseed to help underpin canola as lower Malaysian palm oil weighed on values.

The Saskatchewan weekly crop report stated that some harvesting has begun. Dry, warm weather aided the quicker development of this year’s crops.

The FarmLink farm tour projected 2020 canola yields at 42.9 bushels per acre and forecast production to reach 20.2 million tonnes.

By mid-afternoon the Canadian dollar was at 75.26 U.S. cents, compared to Wednesday’s close of 75.40.

There were 14,160 contracts traded on Thursday, which compares with Wednesday when 20,638 contracts changed hands. Spreading accounted for 5,834 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 489.80 up 1.40
Jan 495.90 up 0.90
Mar 499.80 up 0.20
May 503.80 up 0.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly lower on Thursday, largely due to positioning ahead of the United States Department of Agriculture’s supply and demand report on Aug. 12.

The USDA announced a private sale of 126,000 tonnes of soybeans to China. Delivery will be during the 2020/21 marketing year.

In the weekly export sales report, the USDA said 345,200 tonnes of old crop soybeans were sold for the week ended July 30. New crop sales reached 1.4 million tonnes. Export sales of old crop soymeal came to 328,300 tonnes and 203,900 tonnes for new crop. Soyoil sales were 24,400 tonnes for old crop and 11,100 tonnes of new crop.

There has been favourable weather across the U.S. Corn Belt, especially in the western half, but the entire region is in need of rain.

A survey by Farm Futures estimated 2020 soybean yields across the U.S. at 51.0 bushels per acre.

Soybean exports out of Brazil are projected to hit 6.7 million tonnes in August. That would be a 33 per cent increase compared to August 2019.

CORN futures were firm on Thursday, also due to positioning ahead of the USDA supply and demand report.

Old crop corn export sales were 101,600 tonnes and new crop sales hit 2.6 million tonnes.

The U.S. Energy Information Administration reported ethanol production for with week ended July 31 dropped 2.8 per cent at 931,000 barrels per day. Ethanol inventories increased 0.4 per cent to 20.35 million barrels.

The Farm Futures survey pegged U.S. corn yields at 179 bushels per acre. Estimates from other sources have been as high as 184 bu/ac.

Brazil corn exports in August are expected to reach 6.3 million tonnes, for an increase of a third over the previous August.

WHEAT futures were lower on Thursday, due to speculative selling.

Export sales of 2020/21 wheat totaled 605,500 tonnes.

In Canada, the FarmLink farm tour estimated Prairie wheat yields (excluding durum) at 60.5 bu/ac. and forecast production to be 31.9 million tonnes. The tour called for durum yields to be 45.3 bu/ac. and placed production at 7.0 million tonnes.

In international sales Egypt purchased 410,000 tonnes of wheat of which 295,000 tonnes will be from Russia and 115,000 tonnes from Ukraine.

There’s market speculation that China will increase its wheat imports by 50 per cent to 6 million tonnes during the 2020/21 marketing year. The increase will reportedly cover China’s growing demand for feed.

Futures Prices as of August 6, 2020

Canola
Price Change
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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