North American Grain/Oilseed Review: World oilseeds, loonie push up canola

By Glen Hallick, MarketsFarm

WINNIPEG, July 24 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were stronger on Wednesday, with support from other oilseeds and the Canadian dollar.

European rapeseed prices were higher due to a heat wave affecting much of that continent. Meanwhile in Asia, the monsoons have only provided below average precipitation.

Chicago soybeans gained strength on United States/China trade talks resuming face-to-face in Shanghai on July 29.

The Canadian dollar was hovering around 76.06 U.S. cents as the loonie continues its retreat from highs of this year that it reached last week.

A report from the Canadian Agri-Food Policy Institute stated the current Canada/China dispute could’ve been avoided if the Canadian canola industry had paid closer attention to policy changes in China. That China had been moving to make itself less dependent on overseas exports, as well as increasing its food security.

There were 18,174 contracts traded on Wednesday, which compares with Tuesday when 10,972 contracts changed hands. Spreading accounted for 6,792 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 450.20 up 2.70
Jan 457.50 up 2.90
Mar 464.60 up 3.10
May 470.10 up 2.90

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Wednesday, due in part of trade developments between the United States and China.
After the markets closed yesterday, it was announced that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will be headed to Shanghai, China for trade talks on July 29.

China granted waivers to five companies to import 3 million tonnes of U.S. soybeans.

The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) tweeted on Tuesday that prevent plant acres could be 15 million to 20 million. Should these numbers hold true, that would lead to a massive shift in the domestic and global balance sheets, according to a report. The RMA did not indicate how the prevent plant acres would be divided among the different crops.

Trade expectations for U.S. export sales put soybeans at 100,000 to 250,000 tonnes of old crop, and 150,000 to 300,000 tonnes of new crop. The USDA releases its export sales report on Thursday.

Brazil is poised to produce a record soybean crop in 2020, at 123.80 million tonnes. The country’s 2019 crop came in at 118.20 million tonnes, down from the projected 122.0 million.

CORN futures were slightly weaker on Wednesday, as a lack of trader interest and fresh news limited the possibility for gains.

Trade expectations of U.S. export sales for corn were 200,000 to 400,000 tonnes of old crop and 100,000 to 300,000 tonnes of new crop.

Ethanol production in the U.S. was down by 27,000 barrels per day (BPD) for the week ending July 19. Production for that week amounted to approximately 1.04 million BPD.

Brazil is expected to export approximately 35 million tonnes of corn this year. The country’s corn production was projected at 101 million tonnes this year and is set to increase to 104 million in 2020.

APK-Inform reduced its estimate of Ukraine’s corn crop by 1 million tonnes to now 33.8 million.

WHEAT futures were higher on Wednesday, with stronger gains in Chicago and Kansas City versus smaller increases for Minneapolis.

On the first day of the Wheat Quality Council tour wheat yields were estimate to be 43.1 bushels per acre. The tour was in North Dakota and Minnesota.

Trade expectations of U.S. export sales of wheat were 200,000 to 400,000 tonnes of old crop.

SovEcon has estimated the Russian wheat crop to produce 73.7 million tonnes, a drop of 2.9 million from its previous forecast. SovEcon’s estimate was significantly lower compared to the 76.7 million tonnes by UkrAgroConsult and 76.1 million from the Institute of Agricultural Market Studies. The USDA has projected 74.2 million tonnes.

Futures Prices as of July 24, 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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