By Glen Hallick, MarketsFarm
WINNIPEG, July 8 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were higher on Thursday, as dryness across most of the Prairies fuels nervousness about the upcoming harvest.
A trader explained that some canola blooms have shut down early, which means less pod development and lower production.
There’s speculation already that harvest will come in at 16 million to 18 million tonnes, well below the projected 20 million tonnes.
There were modest declines in the Chicago soy complex as well as small losses in Malaysian palm oil. Some support for canola came from gains in European rapeseed.
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The Saskatchewan weekly crop report noted the lack of moisture and the excessive heat have greatly stressed the province’s crops.
The Canadian dollar was weaker at mid-afternoon, with the loonie at 79.80 U.S. cents, compared to Wednesday’s close of 80.16.
There were 16,214 contracts traded on Thursday, which compares with Wednesday when 25,069 contracts changed hands. Spreading accounted for 6,614 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Nov 814.00 up 23.10
Jan 806.30 up 20.00
Mar 704.40 up 17.10
May 778.20 up 14.00
SOYBEAN futures at the Chicago Board of Trade (CBOT) were down on Thursday as the weather forecast calls for rain over most of the major soybean growing areas of the United States.
The U.S. Department of Agriculture (USDA) announced a private sale of 122,200 tonnes of soymeal to Mexico. Delivery is to be during the 2021/22 marketing year, which for soymeal begins Oct. 1. Also, the USDA has postponed its weekly export sales report to Friday.
Global benchmark crude oil prices could resume falling back over a bitter dispute within OPEC+ regarding production increases.
In Brazil, CONAB issued its monthly supply and demand estimates stating the country’s 2020/21 soybean crop topped 135.91 million tonnes. That’s up slightly from June’s report and 8.7 per cent more than the 2019/20 harvest.
Meanwhile, Brazil agriculture group Abiove has projected the country’s 2021/22 soybean exports to hit a record 86.7 million tonnes. The most recent USDA number placed those Brazil exports at 86 million tonnes.
CORN futures were lower as well on Thursday in sympathy with soybeans.
The U.S. weather forecast has called for seasonably warm temperatures for the northern half of the country until around July 17. This includes wetter-than-normal conditions around the Great Lakes, but continued drought on the Northern Plains.
The U.S. Energy Information Administration (EIA) reported ethanol production increased by 9,000 barrels per day to nearly 1.07 million. That’s 16.7 per cent more than this time last year. Also, the EIA said ethanol stocks were down 423,000 barrels to 21.1 million barrels and year-to-date corn use was 106.77 million tonnes.
Due to drought and frost in Brazil, CONAB cut its 2020/21 corn production estimate by 3.1 per cent from June at 93.39 million tonnes. Hopes had been Brazil would have produced about three million tonnes more this year than the 102.59 million in 2019/20.
WHEAT futures were mixed on Thursday, with losses in Chicago and Minneapolis wheat and gains for Kansas City.
Ahead of Monday’s USDA supply and demand report, trade expectation place wheat ending stocks at around 19.8 million tonnes, down 5.3 per cent from June’s report.
In international purchases, Saudi Arabia bought 359,245 tonnes of wheat, the Philippines acquired 198,674 tonnes of milling and feed wheat, and Japan purchased 108,862 tonnes of wheat.
