North American Grain and Oilseed Review: Canola slips back

Chicago soy complex weakens

By Glen Hallick, MarketsFarm

WINNIPEG, June 9 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower on Wednesday, as rain fell on parts of the eastern Prairies.

Coupled with that were declines in the Chicago soy complex plus the spec funds liquidating their long positions. Losses in European rapeseed and Malaysian palm oil added to the pull back in canola.

While canola finished on the downside, closing prices had pulled away from earlier lows.

Tempering those losses was the ongoing situation with tight ending stocks, and the strong likelihood of those stocks remaining tight through the 2021/22 crop year.

At mid-afternoon the Canadian dollar was relatively steady, with the loonie at 82.60 U.S. cents compared to Tuesday’s close of 82.67.

There were 24,918 contracts traded on Wednesday, which compares with Monday when 21,622 contracts changed hands. Spreading accounted for 11,484 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 864.00 dn 1.80
Nov 763.20 dn 11.00
Jan 762.50 dn 10.10
Mar 758.90 dn 6.00

SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, due to a round of profit-taking.

The day before the United States Department of Agriculture (USDA) is scheduled to issue its monthly supply and demand report, the trade projected old crop soybean stocks to inch up to 122 million bushels from the 120 million in May. New crop ending stocks are predicted to rise from 140 million bushels to 146 million. The World Agricultural Supply and Demand Estimates (WASDE) will be released at 11 am Central on Thursday.

Private consultancy Safras and Mercado estimated Brazil’s 2021 soybean exports could hit 86 million tonnes, compared to 83 million in 2020.

CORN futures were higher on Wednesday, as ending stocks are expected to tighten.

Market expectations have placed the old crop corn carryover at 1.207 billion bushels, compared the 1.257 billion the USDA forecast last month. Ending stocks for new crop corn are projected to drop from the department’s May call of 1.507 billion bushels to 1.423 billion.

Ethanol production in the U.S. was almost 1.07 million barrels per day for the week ended June 4, for a gain of 33,000 barrels per day. Ethanol stocks rose by 372,000 barrels at 19.96 million.

As more and more consultancies have slashed their Brazil corn production forecasts, the trade predicts the USDA will lower its estimate from 102 million tonnes in May to 97.3 million. After Brazil endured a water-logged soybean crop, the country is now in the midst of its worse drought in more than 90 years and slashing its corn production.

WHEAT futures were mixed on Wednesday, as Chicago and Minneapolis pulled back while Chicago made gains.

Rain across parts of the Dakotas and the eastern Canadian Prairies provided a much needed boost to struggling crops. However, a quick return to hot, dry weather is widely expected.

Trade predictions for tomorrow have pegged the old crop wheat carryout at 869 million bushels, slightly lower from the USDA’s May projection of 872 million. New crop ending stocks are to increase from 774 million bushels to 783 million. Also, hard red winter wheat production is projected to rise from 731 million bushels to 760 million.

In international purchases Algeria acquired 400,000 tonnes of wheat, Ethiopia called for a similar amount, Japan tendered for 181.355 tonnes and Jordan issued a call for 120,000 tonnes.

Futures Prices as of June 9, 2021

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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