North American Grain and Oilseed Review: Canola slips after supply and demand report

By Glen Hallick, MarketsFarm

WINNIPEG, Feb. 11 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished steady to lower on Tuesday, as the February supply and demand report from the United States Department of Agriculture (USDA) weighed on values.

In the report, the USDA lowered its January estimate for the U.S. soybean carryover by nearly 1.4 million tonnes at almost 11.6 million. The USDA estimated global soybean ending stocks at slightly less than 98.9 million tonnes for a decline of approximately 2.2 million from last month’s report.

Canola received a little bit of support from slightly higher Chicago soyoil prices, but that was countered by lower European rapeseed and Malaysian palm oil.

By mid-afternoon Tuesday, the Canadian dollar was higher at 75.22 U.S. cents, compared to Monday’s close of 75.08.

There were 23,222 contracts traded on Tuesday, which compares with Monday when 26,734 contracts changed hands. Spreading accounted for 17,198 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 459.40 dn 0.40
May 468.60 dn 0.40
Jul 475.30 dn 0.80
Nov 482.20 dn 0.70

SOYBEAN futures at the Chicago Board of Trade (CBOT) were steady on Tuesday, after trading lower for most of the session. Some strength was found after the USDA released its February supply and demand report.

In the WASDE, the USDA dropped the soybean carryover by 50.0 million bushels at 425.0 million. The USDA pegged global soybean ending stocks at slightly less than 98.9 million tonnes.

Conab increased its estimate of Brazil’s soybean production to about 123.3 million tonnes. That’s a gain of approximately 1.0 million tonnes from its January estimate. The department said soybean acres were up 2.5 per cent at more than 160.1 million. In comparison, the USDA pegged the Brazil soybean harvest at 125.0 million tonnes.

Due to heavy rains Brazil’s soybean harvest stood at 15.7 per cent complete as of Feb. 7, according to ARC Mercosul. That was well below the average pace of 27.3 per cent.

Also, the Brazil real hit a record low today, making its exports cheaper than those from the U.S.

CORN futures were slightly lower on Tuesday, also due to the February WASDE.

The USDA maintained its estimate of corn ending stocks at nearly 1.9 billion bushels. The department said increased domestic use will balance off declines in exports.

Globally, the USDA estimated corn ending stocks at almost 297.0 million tonnes.

Conab reported Brazil’s corn production at almost 100.5 million tonnes. In comparison, the USDA’s estimate was 101.0 million tonnes.

WHEAT futures were lower on Tuesday, with larger losses for Chicago than for Kansas City or Minneapolis.

The USDA reduced its estimate of the wheat carryover by 25.0 million bushels at 940.0 million. The USDA put the global wheat carryover at 288.0 million tonnes.

In international purchases, Algeria issued a tender for 50,000 tonnes and Turkey issued a tender for 150,000 tonnes. Egypt bought 360,000 tonnes with half each from Romania and Russia.

Futures Prices as of February 11, 2020

Canola
Price Change
Milling Wheat
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Durum
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Price Change
New Barley
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Prices are in Canadian dollars per metric ton

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