North American Grain and Oilseed Review: Most active canola months steady to lower

By Glen Hallick, MarketsFarm

WINNIPEG, Jan. 15 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were mixed on Friday, with declines in the most active months and increases in the more deferred months.

There were sharp losses in Chicago soyoil, along with lower values for Malaysian palm oil and European rapeseed.

A trader said that despite the drop in some canola contracts, the declines were well back of product values.

The trader also noted canola values need to climb quite a bit before demand begins to wane. There are concerns that ending stocks could become too low.

The Canadian Grain Commission reported commercial stocks were just short of 1.69 million tonnes as of Jan. 10. That’s 11.5 per cent higher than commercial stocks a year ago. Producer deliveries hit 10.53 million tonnes and are 15 per cent ahead of last year. Exports stood at 5.39 million tonnes, about 34 per cent ahead of those a year ago. Domestic usage reached 4.78 million tonnes, ahead by a little more than one per cent of last year’s pace.

The Canadian dollar was weaker as its United States counterpart gained strength. At mid-afternoon the loonie was at 78.57 U.S. cents, compared to Thursday’s close of 79.03.

There were 26,502 contracts traded on Friday, which compares with Thursday when 35,221 contracts changed hands. Spreading accounted for 18,436 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 687.80 up 0.10
May 668.80 dn 3.50
Jul 652.20 dn 4.80
Nov 554.10 dn 1.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Friday, due to profit-taking and precipitation in South America.

Argentina received rain and is forecast to get more over the coming days. The precipitation will be a much needed boost to the country’s crops.

The United States Department of Agriculture (USDA) reported a private sale of 318,000 tonnes of soybeans to unknown destinations. Delivery is to be during the 2021/22 marketing year.

Although the next USDA supply and demand isn’t until Feb. 9, speculation has already started that endings stocks for soybeans, as well as for corn and wheat, will be further reduced.

The National Oilseed Processors Association reported the December crush consumed 183.16 million bushels of soybeans. Although about two million bushels less than market expectations, the volume was still a record for December.

The International Grains Council (IGC) lowered its estimate for global soybean production by six million tonnes at 359 million. Ending stocks were left at 45 million tonnes.

The U.S. markets will be closed on Monday, Jan. 18 for Martin Luther King Day.

CORN futures were lower on Friday, following soybeans.

The USDA reported a private sale of 110,000 tonnes of corn to Mexico, with delivery during the current marketing year.

The condition of Argentina’s corn crop was raised seven points at 19 per cent good to excellent. This time last year the crop rated 55 per cent.

The IGC lowered its estimate of global corn production by 13 million tonnes at approximately 1.13 billion tonnes. Ending stocks were cut by seven million tonnes at 268 million.

WHEAT futures were higher on Friday, as Russia will increase its export tax on wheat.

Russia said the tax will be raised to 25 Euros on Feb. 15 and then doubled on March 1. Speculation has it that Russia will keep the tax in place after July 1, when its next marketing year for wheat begins.

Dry conditions are affecting more than 60 per cent of the U.S. Northern Plains and the western part of the country. The dryness could limit winter wheat yields.

The IGC reduced its global wheat production forecast by one million tonnes at 768 million, and ending stocks were cut by also one million tonnes at 294 million.

Futures Prices as of January 15, 2021

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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