North American Grain and Oilseed Review: Up limit bounce in canola prices

As U.S. wheat turns stronger, soybeans, corn slip back

By Glen Hallick, MarketsFarm

WINNIPEG, June 23 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were stronger as they finished at the daily limit in the July, November and January contracts on Wednesday. The March contract also reached the upper limit but stepped back a little.

Prairie weather forecasts have called for increased temperatures and very little rain. As crops suffer from stress, the benefits from this month’s rains have dried up, with more precipitation desperately needed to replenish waning soil moisture levels.

Added support came from significant gains in Chicago soyoil and European rapeseed. Declines in Chicago soybeans and soymeal did little to stem the rising tide of prices.

A stronger Canadian dollar also did little to impede canola. The loonie rose to 81.27 U.S. cents compared to Tuesday’s close of 80.93.

Nutrien has denied any partnership with BHP, despite recent reports the mining companies negotiating a partnership of the latter’s C$5.7 billion mine near Jansen, Sask. that’s still under construction.

There were 23,467 contracts traded on Wednesday, which compares with Tuesday when 14,340 contracts changed hands. Spreading accounted for 6,238 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 772.30 up 30.00
Nov 737.90 up 30.00
Jan 739.60 up 30.00
Mar 734.00 up 27.40

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Wednesday, due to recent rainfall on parts of the United States Midwest helping thirsty crops.

The weather forecast called for overnight rain of up to one inch in the Midwest’s northern areas. Heavy rains are to drop of the central and eastern parts of the region beginning tomorrow.

The U.S. Department of Agriculture (USDA) announced a private sale of 330,000 tonnes of soybeans to China. Delivery is to be during the coming marketing year. Also, there is speculation of more purchases to be made by China.

Ahead of Thursday’s export sales report from the USDA, the trade has projected old crop soybean sales from net reductions of 100,000 tonnes to plus 175,000 tonnes. New crop sales are pegged at 200,000 to 800,000 tonnes.

Brazil’s National Association of Cereal Exporters reported the country exported 11 million tonnes of soybeans so far through June.

Egypt purchased 63,000 tonnes of soyoil and 10,500 tonnes of sunflower oil on the international market.

CORN futures were mixed on Wednesday, with modest gains in the old crop contract and small declines in the new crop positions.

Reports said there could be reduced ethanol production in the U.S. and Brazil in the coming months, due to tightening corn supplies and high costs.

For the week ended June 18, the U.S. Energy Information Administration (EIA) reported ethanol production averaged nearly 1.05 million barrels per day. That was an increase over the previous week of 23,000 barrels per day. Ethanol stocks rose 518,000 barrels, bringing the U.S. inventory to 21.12 million barrels, its highest levels since March.

Market expectations for export sales have predicted old crop corn at zero to 400,000 tonnes and new crop at 200,000 to 500,000 tonnes.

A Reuters’ poll estimated Brazil 2020/21 corn production at 93.9 million tonnes. That’s well under the USDA’s current projection of 98.5 million tonnes and CONAB’s call for 96.4 million.

WHEAT futures were stronger on Wednesday, due to struggling crops.

There have been reports of U.S. spring wheat yields possibly falling to 20 bushels per acre due to severe drought across much of the Northern Plains. Meanwhile, the winter wheat harvest has seen strong yields, but poor protein levels. Rain continued to delay harvest progress.

The trade forecast export sales of wheat to 200,000 to 525,000 tonnes.

SovEcon increased its projection on the Russian 2021/22 wheat crop by 2.7 per cent at 84.6 million tonnes. The consultancy pegged Russia’s total grain production in 2021/22 to rise 0.9 per cent at 131 million tonnes.

Futures Prices as of June 23, 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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