By Glen Hallick, MarketsFarm
WINNIPEG, March 31 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures skyrocketed on Wednesday to hit daily limits in the May, July, November and January contracts.
The impetus for the dramatic turnaround from yesterday’s sharp losses was two reports from the United States Department of Agriculture (USDA). The grain stocks as of March 1 report pegged lower stocks of soybeans, corn and wheat than a year ago. More importantly, the USDA prospective plantings report saw increased acres for soybeans and corn come under trade expectations. That, a Winnipeg-based trader said, will lead to tighter stocks.
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The Canadian dollar was stronger, but had little effect on canola. At mid-afternoon, the loonie was at 79.52 U.S. cents compared to Tuesday’s close of 79.17.
There were 23,472 contracts traded on Wednesday, which compares with Tuesday when 20,926 contracts changed hands. Spreading accounted for 8,432 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola May 757.10 up 30.00
Jul 717.70 up 30.00
Nov 619.50 up 30.00
Jan 622.70 up 30.00
SOYBEAN futures at the Chicago Board of Trade (CBOT) increased by their daily limits on Wednesday, in the May to January contracts following the release of two reports by the United States Department of Agriculture (USDA).
In the prospective plantings report, the USDA pegged soybean plantings for 2021 at 87.6 million acres, for a gain of five per cent from last year. However the increase was lower than the 90.1 million acres the markets expected.
In the grain stocks as of March 1 report, the department said total soybean stocks were at 1.56 billion bushels for a drop of 31 per cent from a year ago. Trade expectations called for 1.57 billion bushels. On farm stocks were at 594 million bushels, with commercial stocks at 970 million.
CORN futures were significantly stronger as well on Wednesday after reaching its daily limit in the most active contracts.
The USDA’s projection for corn acres rose by only 0.33 per cent at 91.1 million. As with soybeans, corn was short of trade guesses which averaged about 93 million acres.
Total corn stocks were at 7.70 billion bushels, for a drop of three per cent from a year ago. The markets had been looking for stocks of 7.77 billion bushels. On farm stocks were at 4.04 billion bushels and commercial stocks were at 3.66 billion.
WHEAT futures were higher on Wednesday, catching spillover from soybeans and corn.
Total wheat acres in 2021 were projected to be 46.4 million, for a five per cent gain over 2020. Of that, the USDA said winter wheat acres were nearly at 33.1 million, up nine per cent, while spring wheat was down four per cent at 11.7 million and durum was nine per cent lower at 1.54 million. Spring wheat intentions came in above market projections.
The USDA reported total all wheat stocks at 1.31 billion bushels, down seven per cent from a year ago. However it’s higher than the average trade guess of 1.27 billion bushels. On farm stocks were at 284 million bushels and commercial stocks at 1.03 billion.
