North American Grain and Oilseed Review: Lower soyoil means more losses for canola

Double digit losses for wheat

By Glen Hallick, MarketsFarm

WINNIPEG, March 26 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were weaker on Thursday, as Chicago soyoil remained lower.

A trader said soyoil remains down, despite recovering from larger losses today, as the rebound in energy prices has been slower than expected.

There was support from increases in European rapeseed and Malaysian palm oil.

The Canadian dollar was stronger mid-afternoon Wednesday and weighed on values. The loonie was at 71.17 U.S. cents, compared to Wednesday’s close of 69.92.

There were 14,733 contracts traded on Thursday, which compares with Wednesday when 22,699 contracts changed hands. Spreading accounted for 9,876 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 462.80 dn 2.80
Jul 471.60 dn 3.00
Nov 480.20 dn 2.60
Jan 486.30 dn 3.10

SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly lower on Thursday, as the rally in soyoil ended sooner than anticipated as the rebound in energy prices hasn’t happened as quickly as hoped.

In the weekly export sales report from the United States Department of Agriculture (USDA), old crop soybeans came in at 904,300 tonnes for the week ended march 19. That was up 43 per cent previous week. New crop sales were 500 tonnes. The top purchaser for the week was unknown destinations at 406,100 tonnes. Old crop/new crop soymeal export sales exceeded 251,200 tonnes and soyoil was at 55,900 tonnes.

In the lead up to the USDA’s planting intentions estimates on March 31, Reuters issued the results of its survey of U.S. farmers. Reuters found soybean acres are very likely to increase from last year’s estimated 76.1 million acres to a range of 82.7 million to 87.1 million. Also ahead of the USDA’s grain stocks as of March 1 report, the Reuters survey put soybean stocks at 2.2 billion bushels, down from the 2.7 billion last year.

Concerns over the COVID-19 pandemic have led to shipping delays in South America, particularly Argentina and Brazil. Not only have there been issues in getting soybeans to ports, delays at those ports have slowed exports.
One end result of those delays has been crushers in China are having difficulty in acquiring soybeans. China’s stocks of soybeans and soymeal fell to 10-year lows. China has approximately 3.3 million tonnes of soybean and 375,000 tonnes of soymeal.

CORN futures were steady on Thursday, with strong export sales countering declines in the ethanol industry.

The USDA reported export sales of old crop corn were more than 1.8 million tonnes, which was a marketing year high. China was the top customer at 756,000 tonnes. There were 82,900 tonnes of new crop corn sold.

With reduced U.S. ethanol production, the markets now expect corn ending stocks to increase. The USDA’s March supply and demand report estimated the 2019/20 carry-over to be almost 1.9 billion bushels, but some industry predictions said that could jump to 2.2 billion.

The Reuters survey estimated U.S. corn acres to be 92.5 million to 96.4 million, which would exceed last year’s estimate 89.7 million acres of corn. The survey forecast March 1 corn stocks to decline from about 8.6 billion bushels last year to around 8.1 billion bushels this year.

WHEAT futures were weaker on Thursday, with double digit losses for Chicago and Kansas City, and a moderate decline for Minneapolis.

Export sales of old crop wheat totaled 740,000 tonnes, which was an improvement over the previous week. New crop sales topped 366,400 tonnes. China led all importers with total purchases of 485,000 tonnes.

There has been market speculation that Russia could restrict the number of phyto-sanitary certificates it issues for wheat exports.

Futures Prices as of March 26, 2020

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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