By Glen Hallick, MarketsFarm
WINNIPEG, Feb. 19 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts continued to hit new highs on Friday, as supplies tighten.
Of note, the soon-to-expire March contract peaked at a record C$780.90 per tonne before stepping back.
A trader said Canada is essentially running out of canola, which has led to price rationing and sharp hikes in cash prices.
The Canadian Grain Commission shed some light on the situation in its weekly grain movement report. For the week ended Feb. 14, producer deliveries of canola dropped 46 per cent from the previous week at 263,000 tonnes. Exports plummeted 70 per cent at less than 51,000 tonnes and domestic usage was down 11.5 per cent at 178,000 tonnes. The frigid temperatures across the Prairies also played a role in the declines.
Although canola has been acting independently, it did garner spillover from sharp gains in Chicago soyoil.
At mid-afternoon, a higher Canadian dollar weighed on canola values. The loonie was at 79.21 U.S. cents, after closing Thursday at 78.76.
There were 23,259 contracts traded on Friday, which compares with Thursday when 30,788 contracts changed hands. Spreading accounted for 10,196 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Canola May 735.50 up 8.60
Jul 705.50 up 10.40
Nov 592.50 up 9.10
Jan 593.00 up 8.10
SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Friday, as ending stocks are forecast to remain tight in 2021/22.
The United States Department of Agriculture issued more preliminary estimates at its annual Outlook Conference. The department forecast soybean production in 21/22 to be nearly 123.2 million tonnes, and ending stocks of about 3.9 million. Firmer numbers will be released in the USDA’s crop production forecast on March 31.
In the weekly export sales report from the USDA, for the week ended Feb. 11, old crop soybean export sales were 455,900 tonnes. That’s down 43 per cent from the previous week. New crop sales came in at 168,000 tonnes. There were sales of 322,200 tonnes of old crop soymeal, along with 4,400 tonnes of soyoil.
CORN futures were lower on Friday, following the USDA conference.
In the department’s early call on corn, it projected 21/22 production at 384.8 million tonnes with ending stocks of 39.4 million. That bumped up the stocks to use ratio to 10 per cent, for a slight improvement over 20/21.
The USDA reported corn export sales of 999,200 tonnes of old crop, which fell 31 per cent from the previous week. New crop sales were 182,600 tonnes.
The Buenos Aires Grain Exchange (BAGE) said the Argentina corn harvest should come in at 46 million tonnes. That would be down almost 11 per cent from 2020.
WHEAT futures were lower on Friday, also after the USDA conference.
The USDA projected total wheat acres to be 45 million in 2021, with 32 million acres of winter wheat. Total production was estimated at 48.9 million tonnes, with ending stocks at a pinch under 19 million tonnes.
At 399,100 tonnes, wheat export sales dropped 33 per cent from the previous week. New crop sales were 214,400 tonnes.
SovEcon lowered its estimate of Russian wheat production by two per cent at 76.2 million tonnes.
Futures Prices as of February 19, 2021
Prices are in Canadian dollars per metric ton