North American Grain/Oilseed Review: Jump in soybeans boosts canola prices

By Glen Hallick, MarketsFarm

WINNIPEG, July 12 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were higher on Friday, due to spillover from a sharp jump in Chicago soybean prices.

Despite improving soil moisture levels across the Prairies, there remain some areas with dry conditions, which also provided support for canola bids.

While the United States Department of Agriculture maintained its estimate of Canadian canola production at 20.1 million tonnes, an independent analyst stated that number should be reduced by up to 2 million tonnes. The analyst cited the dry conditions that have affected Western Canada so far this year.

The rising Canadian dollar tempered gains in canola. As of mid-afternoon Friday, the loonie reached 76.76 U.S. cents.

There were 11,328 contracts traded on Friday, which compares with Thursday when 10,731 contracts changed hands. Spreading accounted for 4,604 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 450.70 up 3.50
Jan 457.70 up 3.20
Mar 464.50 up 3.20
May 470.30 up 3.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Friday, spurred by technical buying on the final day for July grain and oilseed contracts.

Tropical Storm Barry will disrupt the United States grain transportation system when the storm strikes Louisiana this weekend. Barry is expected to produce winds in excess of 80 kilometers per hour and dump more than 60 millimeters of rain. With wet conditions so far this year, the Mississippi River has already reached record high levels. The storm will put the state’s post-Hurricane Katrina flood defences to the test.

As U.S./China trade talks resumed by teleconference, U.S. President Donald Trump said on Thursday that China isn’t importing enough agricultural goods from the U.S. Meanwhile, China is said to be looking for the U.S. to ease its restrictions on Huawei. A U.S. trade official said face-to-face negotiations will begin in the near future in China.

China reported its soybean imports for June were approximately 6.50 million tonnes, a drop of 12 per cent compared to May. As well, imports are down 16.5 per cent on the year so far at 38.27 million tonnes. The country’s plight with African swine fever has decimated its hog population and reduced its demand for beans.

Also, China has about 5.72 million tonnes of old crop soybeans still in the U.S. awaiting shipment. Reports stated the shipments will likely be rolled into the new crop.

CORN futures were stronger on Friday, due to spillover from soybeans and forecasts for a heat wave on the U.S. Plains.

This morning, the USDA announced a sale of 104,000 tonnes of corn to Panama with delivery during the 2019/20 crop year.

France’s corn crop was rated at 78 per cent good to excellent condition, down a point from the previous week.

WHEAT futures were up slightly on Friday, with support from decreased world production numbers.

The USDA, in its monthly supply and demand report issued Thursday, estimated world wheat production at 771.46 million tonnes. That’s from June’s estimate of 780.83 million tonnes.

France’s soft wheat crop was rated at 73 per cent good to excellent, down two points from the previous week. Approximately nine per cent of the country’s wheat has been harvested, up from one per cent last week.

Futures Prices as of July 12, 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

explore

Stories from our other publications