North American Grain/Oilseed Review: Canola drops sharply

By Phil Franz-Warkentin, MarketsFarm

WINNIPEG, Oct. 12 (MarketsFarm) – The ICE Futures canola market was sharply weaker on Tuesday, falling in sympathy with the Chicago Board of Trade soy complex as the futures had a bearish reaction to updated supply/demand data from the United States Department of Agriculture.

Upward revisions to both U.S. and world soybean ending stocks estimates from the USDA weighed heavily on both soybean and canola futures, with bearish chart-signals contributing to the weaker tone in the Canadian oilseed.

Overbought price sentiment after last week’s rally, together with the firm Canadian dollar, also weighed on prices.

However, tight supplies and the need to ration demand remained supportive on the other side.

About 37,778 canola contracts traded on Tuesday, which compares with Friday when 21,729 contracts changed hands. Canadian markets were closed Monday for Thanksgiving. Spreading accounted for 24,358 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were down sharply on Tuesday, as the market had a bearish reaction to updated supply/demand and production data from the United States Department of Agriculture.

The government agency raised its yield estimate for this year’s U.S. soybean crop to 51.5 bushels per acre, which would be up by half a bushel on the year and above trade guesses. Production was raised to 4.448 billion bushels.

U.S. soybean ending stocks for the 2021/22 marketing year were raised to 320 million bushels, roughly double the September forecast and at the higher end of trade expectations. World soybean carryout, at 104.6 million tonnes, was about four million tonnes above average trade guesses.

The USDA reports were also bearish for CORN. Average U.S. corn yields were pegged at 176.5 bushels per acre, which was up slightly on the month and at the higher end of trade guesses. That took total production to just over 15 billion bushels. U.S. corn ending stocks were upped to 1.5 billion bushels.

World corn ending stocks were raised to 301.7 million tonnes.
The USDA announced flash sales of 165,000 tonnes of corn to Mexico this morning.

WHEAT was higher, seeing a bullish reaction to the day’s slew of data.

Projected U.S. wheat ending stocks were in line with expectations at 580 million bushels, but the world supply situation was deemed tight.

Global wheat carryout for the current marketing year was pegged at 270.2 million tonnes, down by six million from the September estimate and well below average trade expectations.

Futures Prices as of October 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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