North American Grain and Oilseed Review: USDA report sends prices skyrocketing

By Glen Hallick, MarketsFarm

WINNIPEG, Jan. 12 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola prices hit new contract highs on Tuesday, due to spillover from sharp gains in the United States markets.

The U.S. Department of Agriculture’s latest supply and demand report cut ending stocks for soybeans, corn and wheat, which had a bullish effect on prices.

Despite the increases in Chicago soybeans and soymeal, soyoil ended the day unchanged. There were moderate gains in European rapeseed, while Malaysian palm oil was lower.

At mid-afternoon the Canadian dollar was regaining much of the ground it lost yesterday. The loonie was at 78.62 U.S. cents, compared to Monday’s close of 78.20.

There were 46,749 contracts traded on Tuesday, which compares with Monday when 36,818 contracts changed hands. Spreading accounted for 25,012 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 686.90 up 14.10
May 669.00 up 10.80
Jul 652.20 up 9.10
Nov 547.90 up 1.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Tuesday, rising sharply due to the latest supply and demand report from the United States Department of Agriculture (USDA).

In the January World Agricultural Supply and Demand Estimates (WASDE), ending stocks for soybeans were lowered from 175 million bushels a month ago to 140 million bushels. Ending stocks in the previous crop year were 525 million bushels.

Also, the USDA issued its quarterly grain stocks report with soybean stocks as of Dec. 1 at 2.93 billion bushels. That’s a drop of about 10 per cent from the previous December.

The department cut its forecast for soybean production in Argentina by just over three per cent from December at 47.5 million tonnes. However the USDA maintained its projection for Brazil soybean production at 133 million tonnes.

The weather forecast for South America has called for rain over central and southern Brazil during the next six to 15 days. However the forecast called for continuing dry conditions for Argentina as well as northern Brazil.

China reported an increase in its 2020/21 soybean imports from 95.1 million tonnes to 98.1 million.

CORN futures were significantly higher on Tuesday, hitting its daily limit of 25 cents per bushel.

The USDA lowered its prediction for corn ending stocks from more than 1.7 billion bushels in December to 1.55 billion bushels. A year ago the carryout for corn was 1.92 billion bushels.

Corn stocks as of Dec. 1 were slotted at 11.32 billion bushels, which was in line with stocks from the previous December.

The USDA cut its forecast for corn production in Argentina from 49 million tonnes to 47.5 million. Brazil corn production was reduced by one million tonnes to 109 million.

China raised its 20/21 corn imports from seven million tonnes to 10 million.

WHEAT futures were stronger on Tuesday, also caught up in the bullish increases in the markets.

The USDA lowered its estimate of total wheat ending stocks from 862 million bushels in December to 836 million. That placed ending stocks at nearly 19 per cent lower than those a year ago.

Total wheat stocks as of Dec. 1 came in at 1.67 billion bushels which is down a little more than nine per cent from the previous December.

The department estimated 2021 winter wheat acres to harvest at 32 million, an increase of five per cent over those in 2020.

Futures Prices as of January 12, 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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