North American Grain/Oilseed Review: Canola prices drop

By Glen Hallick, MarketsFarm

WINNIPEG, July 25 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were lower on Thursday, as the market continues to lack direction.
Good weather across the Prairies have improved crop conditions, which have weighed on values.

Below average monsoon rainfall in Asia has increased palm oil prices, which has provided support. As well as a heat wave in Europe, with temperatures pushing into the low 40’s Celsius, has posed a threat to the continent’s rapeseed crops.

Lower soybean bids in Chicago spilled over into canola.

The Canadian dollar has slipped below 76 U.S. cents to 75.96. As the loonie drops it will transition from weighing on values to being supportive.
There were 11,044 contracts traded on Thursday, which compares with Wednesday when 18,174 contracts changed hands. Spreading accounted for 3,286 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 448.90 dn 1.30
Jan 456.20 dn 1.30
Mar 463.40 dn 1.20
May 468.90 dn 1.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Thursday, due to poor export sales.

In the United States Department of Agriculture’s (USDA) weekly export sales report, issued Thursday, old crop soybeans failed to meet trade expectations. When cancelled sales were accounted for, net sales were close to minus 78,200 tonnes. New crop soybeans met trade predictions at around 223,700 tonnes. Soymeal sales were about 227,230 tonnes and soyoil sales amounted to 12,725 tonnes.

U.S. Agriculture Secretary Sonny Perdue announced the details of the US$16 billion aid program for farmers hurt by the U.S./China trade war. Payments to farmers through the Markets Facilitation Program (MFP) will be based on how much of a given crop was grown in their county. Per acre rates will be from US$15 to US$150. The maximum amount a farmer can received will be US$500,000. Also, farmers who filed a prevent planting claim, and planted a certified cover crop, will qualify for a US$15 per acre payment.

Ahead of U.S./China trade talks resuming on Monday, China permitted the import of some U.S. agriculture products without imposing tariffs.

The International Grains Council (IGC) stated in its July forecast that global soybean production for 2018/19 will be a record 363.0 million tonnes. The IGC projected 2019/20 production at 348.0 million tonnes, revised downward by 1 million from its June report. The 15.0 million-tonne drop from year-to-year reflected the much anticipated decline in United States soybean crop.

The IGC changed its 2019/20 carryout forecast from 45 million tonnes in its June report to 44.0 million in July’s. The council pegged the 2018/19 carryout at 55.0 million tonnes.

CORN futures were slightly lower on Thursday, due to pressure from export sales.

Old crop corn export sales came in below trade estimates. The USDA said sales amounted to nearly 121,200 tonnes. New crop corn was slightly above expectations at about 386,615 tonnes.

The IGC pegged 2019/20 global corn production at 1.092 billion tonnes, a slight drop from the 1.095 billion estimated in June. The carryover was revised from 271.0 million tonnes to 273.0 million. The 2018/19 carryover was forecast at 322.0 million tonnes.

WHEAT futures were steady on Thursday, with slight gains in Chicago and Minneapolis and a small drop in Kansas City.

Wheat sales in the USDA’s weekly export sales report far exceeded trade expectations, at 659,720 tonnes, up 90 per cent from last week and nearly 71 per cent than this time last year.

The IGC revised its projection of global wheat production to 763.0 million tonnes, for a drop of 6 million tonnes between the council’s June and July reports.
However, the July figure remained larger than the 2018/19 forecast of 733.0 million tonnes.

The IGC lowered its carryover estimate for 2019/20 from 275.0 million tonnes to 270.0 million, but still more than the 2018/19 carryover of 262.0 million tonnes.

Egypt announced on Wednesday that it has sufficient strategic reserves of wheat to last the next four to five months. Egypt is the world’s largest importer of wheat.

Brazil has imported about 6.71 million tonnes so far in 2019, with expectations of even more as frost damaged wheat in the country’s Parana state.

Futures Prices as of July 25, 2019

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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