North American Grains/Oilseed Review – Canola firms despite bearish stocks data

By Dave Sims, Commodity News Service Canada

Winnipeg, February 8 (CNS Canada) – The ICE Futures Canada canola complex finished higher on Thursday, taking strength from gains in U.S. soybeans.

Both oilseeds fell after the release of this morning’s USDA supply and demand report. The USDA pegged soybean ending stocks in the U.S. at 530 million bushels, which was 60 million bushels more than the last forecast. However, in the minutes that followed speculators and bargain hunters stepped in and quickly turned the market around.

As well, the rain in Argentina doesn’t look like it will be nearly enough to quench the severe dryness affecting soybean fields.

The Canadian dollar was slightly lower relative to its U.S. counterpart, which made canola more attractive to foreign buyers.

Crush margins have been rising in recent days and slow farmer
selling lent support to values.

However, sharp losses in U.S. soyoil capped the upside.

Commercial buying remains lukewarm.

Around 27,802 canola contracts were traded on Thursday, which compares with Wednesday when around 27,004 contracts changed hands. Spreading accounted for 21,720 of the contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Soybean futures on the Chicago Board of Trade finished higher on Thursday. The market took strength from solid gains in soymeal and dry weather concerns in Argentina.

Heading into today’s USDA supply and demand report, the average guess by analysts for U.S. ending stocks was 486 million bushels, much lower than the 530 million bushels that were cited. Weak exports were behind the larger stocks.

Another bearish factor to emerge from the report was the trade guess for Brazilian production. The USDA pegged it at 112 million tonnes, 800,000 tonnes higher than expected.

The corn market ended slightly higher with good weekly export sales. U.S. exporters sold 1.77 million tonnes last week, which was near the top end of analysts’ expectations.

In a report out today, Brazil’s agricultural arm CONAB pegged Brazilian corn production at 88 million tonnes, which was down from last year’s figure of 98 million tonnes.

The USDA forecast domestic ending stocks at 2.35 billion bushels. That compares to the previous estimate of 2.48 billion.

Chicago wheat futures weakened on Thursday, as traders went looking for profits in the wake of yesterday’s gains.

U.S. wheat ending stocks were raised to 1.01 billion bushels in today’s USDA report. That was well above the previous estimate of 990 million bushels.

Weekly export sales came in at 394,000 bushels, which was roughly in line with traders’ expectations.

Futures Prices as of February 8, 2018

Canola
2018-02-08 13:18
Price Change
Mar 499.30 1.10
May 505.50 1.10
Jul 510.20 0.90
Nov 507.70 1.20
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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