By Glen Hallick, MarketsFarm
WINNIPEG, July 7 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures regained of their lost strength on Wednesday, as the Prairie forecast called for warm, dry weather for the rest of the week.
With drought conditions across much of the region, a trader emphasized canola prices need to be rationed as supply is to remain very tight after the coming harvest. He estimated production to be about 16 million to 17 million tonnes, rather than the 20 million tonnes Agriculture and Agri-Food Canada (AAFC) projected.
The trader commented that canola prices have been too low recently when compared to other edible oils.
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ICE canola retreats
Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange took a step back of Wednesday morning amidst mixed sentiment…
Additional support for the Canadian oilseed came from gains in the Chicago soy complex and European rapeseed. Meanwhile there were modest declines in Malaysian palm oil.
The Canadian dollar was lower at mid-afternoon, with the loonie at 80.19 U.S. cents, compared to Tuesday’s close of 80.35.
There were 25,069 contracts traded on Wednesday, which compares with Tuesday when 19,255 contracts changed hands. Spreading accounted for 9,754 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Nov 790.90 up 19.50
Jan 786.30 up 18.20
Mar 777.30 up 17.20
May 764.20 up 15.30
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, rebounding from near limit down losses.
The United States Department of Agriculture (USDA) issued its weekly crop progress report on Tuesday for the week ended July 1. Soybean conditions came in at 59 per cent good to excellent for a dip of one point from the previous week. Soybeans blooming were at 29 per cent, a little more than double from last week and five points ahead of the average pace. Soybeans setting pods registered on the report for the first time this year at three per cent, which matched the average.
There are reports indicating that farmers in China will switch from growing soybeans, sorghum and small grains to corn.
CORN futures were lower on Wednesday, as the U.S. Corn Belt is forecast to receive one to three inches of rain over the next 10 days.
The USDA reported corn conditions of 64 per good to excellent, the same as last week. Corn silking was at 10 per cent, up six points, but four behind the average.
Reports pointed to China’s corn acres which could expand by six per cent in 2021/22, and would result in less foreign imports.
WHEAT futures were mixed on Wednesday, with losses for Chicago and small to moderate increases for Kansas City and Minneapolis.
U.S. spring wheat conditions fell to their lowest levels since 1988, with a mere 16 per cent good to excellent, down four from the previous week. About 69 per cent has headed, up 21 points on the week and seven more than the average.
Crop conditions for U.S. winter wheat dipped one point at 47 per cent good to excellent. The harvest remained behind pace at 45 per cent complete, compared to the average of 53. But there was a 12-point gain from previous week.
The wheat harvest in Russia has covered 1.46 million acres combined at this point, which was 63 per cent less than a year ago.
The German farmers’ union, DBV, projected that country’s wheat production to increase by five per cent in 2021/22 at 22.8 million tonnes.
