By Glen Hallick, MarketsFarm
WINNIPEG, Dec 6 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures closed lower on Tuesday giving up all or more of yesterday’s increases.
Canola saw gains recently as it became too cheap when compared to other vegetable oils. Even with today’s losses, canola is more in line with its counterparts.
Pressure came from sharp drops in the canola crush margins, having backed away from record highs. Steep losses in Chicago soyoil also weighed on values.
Global crude oil prices were weaker, which tempered increases in European rapeseed and Malaysian palm oil. Despite lower crude, there were strong upticks in Chicago soybeans and soymeal.
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Canada is facing lower-than-expected canola exports following the latest crop estimates in Australia. The latter projected its canola production for 2022/23 to reach 7.3 million tonnes. With Australian exports possibly reaching six million tonnes that means Canada very likely won’t meet its goal of 9.3 million tonnes.
The Canadian dollar was weaker at mid-afternoon, with the loonie falling to 73.18 U.S. cents, compared to Monday’s close of 73.90.
There were 26,439 contracts traded on Tuesday, which compares with Monday when 39,603 contracts changed hands. Spreading accounted for 17,510 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jan 849.50 dn 9.50
Mar 839.70 dn 10.30
May 842.40 dn 11.50
Jul 845.00 dn 12.50
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Tuesday along with sharp upticks in soymeal. However with declines diesel prices, Chicago soyoil was weaker.
The United States Department of Agriculture (USDA) announced two private sales of current crop soybeans, with 264,000 tonnes to China and 240,000 tonnes to unknown destinations.
Ahead of the USDA’s monthly supply and demand estimates on Friday, the average trade guess has projected a 13 million-bushel increase to 2022/23 U.S. soybean ending stocks at 233.3 million bushels.
Also, the trade pegged USDA’s 2022/23 Brazil soybean production estimates at 152.2 million tonnes. There are expectations that CONAB will up its estimate this week to 155.01 million tonnes.
Meanwhile, the markets believe the USDA’s call for Argentina will be lowered to 48.8 million tonnes due to continued dryness in the country. More hot and dry weather is in Argentina’s forecast this week. Any break in the current weather pattern might not come until the La Nina weakens.
Strategie Grains estimated the 2022/23 European Union rapeseed crop is to remain firm at 19.5 million tonnes. Sunflower seeds are to increase 24 per cent at 11.2 million tonnes and soybeans are to jump 30 per cent at 3.1 million tonnes.
WHEAT futures were lower on Tuesday due to a lack of support.
The average trade guess placed 2022/23 U.S. wheat ending stocks rising 10.3 million bushels at 581.3 million.
The Australian Bureau of Agricultural and Resource Economics (ABARES) estimated the country’s 2022/23 wheat crop at 36.6 million tonnes, up one per cent from last year’s record production despite severe flooding. Barley production was projected to be 13.4 million tonnes.
In international purchases, South Korea bought 50,000 tonnes of U.S. milling wheat and 60,000 tonnes of Australian feed wheat. Japan issued its weekly tender for 155,000 tonnes of wheat from Canada, the U.S. and Australia.
CORN futures were lower on Tuesday as pressure from wheat overpowered support from soybeans.
Market expectations for Friday’s report bump up the 2022/23 carryover for U.S. corn by 56 million bushels at 1.24 billion. The trade has the USDA projecting South American corn production for 2022/23 at 130 million tonnes for Brazil and 53.8 million for Argentina.
The trade placed CONAB’s estimate for Brazil corn production at 126.28 million tonnes.
In international purchases, South Korea acquired 65,000 tonnes of corn from South America, while Taiwan tendered for up to 65,000 tonnes from either the U.S., South America or South Africa.
