By Glen Hallick, MarketsFarm
WINNIPEG, Jan. 12 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures dropped back in the old crop months on Wednesday, while new crop November had a modest increase.
A sharp drop in European rapeseed combined with profit-taking weighed on canola values. Meanwhile gains in Malaysian palm oil and a positive turnaround in the Chicago soy complex provided support. Increases in global crude oil prices lent support to edible oils.
An analyst commented the short, medium and long term trends in canola remained pointing upward.
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At mid-afternoon, the Canadian dollar was stronger and putting pressure on canola. The loonie jumped to 79.98 U.S. cents, compared to Tuesday’s close of 79.33.
There were 23,686 contracts traded on Wednesday, which compares with Tuesday when 15,017 contracts changed hands. Spreading accounted for 13,504 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Mar 1,014.70 dn 13.40
May 991.80 dn 7.80
Jul 951.00 dn 0.30
Nov 800.00 up 7.30
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, turning around from losses following the release of several reports from the United States Department of Agriculture (USDA), as well as declining crop conditions in South America.
In the monthly supply and demand estimates, the USDA raised ending stocks for 2021/22 soybeans 2.9 per cent from last month at 350 million bushels.
Due to dryness in South America, the USDA reduced its projection for soybean production in Argentina by 6.1 per cent at 46.5 million tonnes, and for Brazil production was cut 3.5 per cent at 139 million tonnes. In comparison, consultancy Patria Agronegocios slashed its projection of Brazil’s soybean crop by 6.5 per cent at 136.24 million tonnes.
The weather forecast in Argentina and southern Brazil has called for record or near-record high temperatures. Parts of Argentina could reach 45 degrees Celsius and upwards to 90 per cent of soybean crop in southern Brazil could be wiped out if it doesn’t rain soon. Water levels on the Parana River in Argentina have fallen to a record low, which will necessitate grain vessels to reduce cargoes by 30 per cent.
In the grain stocks as of Dec. 1 report, the USDA increased total on farm and commercial soybean stocks by seven per cent at 3.15 billion bushels compared to last December.
The USDA also published its final crop production summary for 2021, showing nearly 87.2 million acres of soybeans were planted last year, up 4.6 per cent from last year. Harvested acres rose 4.5 per cent at 86.33 million.
The USDA announced a private sale of 132,000 tonnes of soybeans to China, with delivery to be during the 2022/23 marketing year.
CORN futures were down slightly on Wednesday, with pressure from wheat outweighing support from soybeans.
The USDA reported a flash sale of 100,000 tonnes of corn to unknown destinations, with delivery to be during the current marketing year.
The department raised the 2021/22 carryover for corn 3.1 per cent at 1.54 billion bushels.
For South America, the USDA cut corn production in Brazil by 2.5 per cent at 115 million tonnes and trimmed 500,000 tonnes off of its projection for Argentina at 54 million.
Total U.S. corn stocks were pegged at 11.6 billion bushels, for a gain of three per cent since last December.
In the crop summary, the USDA said 93.36 million acres of corn were planted in 2021, up three per cent from the previous year. Harvest acres climbed five per cent at 85.39 million.
China has reduced its corn consumption estimate by a little more than one per cent at 287.7 million tonnes due to lower feed and industrial demand.
WHEAT futures were weaker on Wednesday, with double-digit losses in the winter wheats and a more modest decline in spring wheat.
The USDA raised 2021/22 wheat ending stocks by five per cent at 628 million bushels. Total stocks as of Dec. 1 came to 1.39 billion bushels, tumbling 18 per cent from a year ago.
The department estimated winter wheat acres for 2022 were almost 34.4 million, up 2.2 per cent from 2021.
FranceAgriMer reduced the country’s soft wheat exports by 2.2 per cent at nine million tonnes and raised ending stocks 2.9 per cent at 3.6 million tonnes.
In International purchases Japan tendered for 80,000 tonnes of feed wheat, while Iran and Algeria are calling for 60,000 tonnes and 50,000 tonnes of milling wheat respectively.
