By Glen Hallick, MarketsFarm
WINNIPEG, March 10 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower on Friday, with double-digit declines in the old crop months.
A trader said there’s a selloff in the oilseed markets, noting that losses in canola are “just a continuation of the trend.”
“For now it’s breaking out of the long-term range,” he added.
The May canola contract not only cracked through the latest support level of C$778 per tonne but could soon fall as low as C$750.
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Additional pressure on the Canadian oilseed came from losses in the Chicago soy complex and European rapeseed, along with sharp declines in Malaysian palm oil. Moderate upticks in global crude oil prices were helping to stem further pull backs in the vegetable oils.
The Canadian Grain Commission reported that 2022/23 canola exports of 5.31 million tonnes remained well ahead of those from last year. Domestic usage of 6.08 million tonnes was also ahead of last year’s pace.
The Canadian dollar was lower at mid-afternoon Friday with the loonie at 72.33 U.S. cents, compared to Thursday’s close of 72.52.
There were 45,345 contracts traded on Friday, which compares with Thursday when 45,487 contracts changed hands. Spreading accounted for 26,426 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change Canola May 777.80 dn 14.50 Jul 775.30 dn 13.30 Nov 755.80 dn 7.50 Jan 760.40 dn 7.70
SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Friday, propelled by the selloff in the oilseed markets.
Concerns over another interest hike by the United States Federal Reserve put a damper on most of the markets. Continued job growth in the U.S. is likely to lead to the Fed to push up rate even more.
The U.S. National Weather Service said the La Nina has ended and an El Nino will likely arrive during this summer.
Due to the severe drought, the Buenos Aires Grain Exchange (BAGE) cut 4.5 million tonnes from its projection of Argentina’s 2022/23 soybean crop, now at 29 million. Yesterday, the Rosario Grain Exchange reduced its forecast to 27 million tonnes, and on Wednesday the USDA cut is projection to 33 million tonnes. In 2021/22, Argentina harvested 43.3 million tonnes of soybeans.
WHEAT futures were stronger on Friday with double-digit gains for Chicago and Kansas City.
A snowstorm will make its way across much of the U.S. Northern Plains through the weekend. The Southern Plains are forecast to receive rain.
Kansas State University issued its first assessment of the Kansas wheat crop for 2023 pegging it at 241 million bushels, down three million from last year.
Talks are to be held to extend the Black Sea export deal between Ukraine and Russia. Negotiations will not be face-to-face, rather delegations from the United Nations will meet with each side separately in different cities. The current deal is set to expire on March 18.
A report said total grain production in Ukraine for 2023 is expected to drop 37 per cent from last year at 34 million tonnes. Production before the Russian invasion was 86 million tonnes.
Russia’s Hydrometeorological Centre said about five to six per cent of the country’s winter crops suffered damage over the cold season.
CORN futures were higher on Friday, pulled up by the turnaround in wheat.
The BAGE reduced its forecast on 2022/23 Argentina corn production by 3.5 million tonnes, bringing it to 37.5 million. On Thursday, the Rosario exchange reduced its projection to 35 million tonnes and on Wednesday the USDA pegged it at 40 million. Last year Argentina reaped 52 million tonnes of corn.
The Argentine government said it will allow corn exports to be rescheduled for up to 180 days due to the steep decline in production. So far 10.8 million tonnes have been exported this marketing year, with plans of up to 20 million.
Canada has followed the U.S. and requested formal talks with Mexico regarding genetically modified crops. The latter plans to ban or limit the amount of GMO corn it imports. Unlike the U.S., Canada is not a major grain exporter to Mexico but its concerned Mexico’s policies could set a precedent under the U.S.-Mexico-Canada Agreement.
