By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 12 (MarketsFarm) – The ICE Futures canola market was weaker on Friday, as losses in Chicago soybeans and soyoil spilled over to weigh on values. Chart-based speculative selling was a feature, with canola down for the third session in a row.
A bearish reaction to the United States Department of Agriculture’s latest production and stocks estimates for soybeans weighed on the oilseed markets, with the government agency also calling for a large Canadian canola crop.
The USDA pegged Canada’s 2023 canola production at 20.3 million tonnes, which would be well above the 18.5 million tonnes currently forecast by Agriculture and Agri-Food Canada.
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Losses in European rapeseed futures were another bearish influence, although Malaysian palm oil was firmer on the day.
Seeding progress is varied across Western Canada, with forecasts looking relatively favourable in most areas over the next week.
About 28,385 canola contracts traded on Friday, which compares with Thursday when 25,009 contracts changed hands. Spreading accounted for 17,236 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were down sharply on Friday, as the market reacted to the latest supply/demand estimates from the United States Department of Agriculture.
The USDA raised its old crop soybean ending stocks forecast by five million bushels, now at 215 million, which was in line with trade expectations. New crop U.S. soybean production was pegged at 4.51 billion bushels, with average yields of 52 bushels per acre. Ending stocks for 2023/24 were forecast to hit 335 million bushels, which would be well above average trade expectations.
World soybean ending stocks are forecast to rise to 122.5 million tonnes, from 101 million in 2022/23.
The good spring seeding pace was also bearish.
CORN was pressured by USDA data as well, although a rally in wheat provided some spillover support on the other side leaving the corn market mixed at the final bell.
U.S. corn production is expected to rise to 15.27 billion bushels in 2023/24, from 13.73 billion the current crop year. Ending stocks for both the current marketing year and the new crop were above expectations at 1.4 billion and 2.2 billion bushels respectively.
World corn ending stocks are forecast at 312.9 million tonnes in 2023/24, from 297.4 million this year, which was above average trade guesses.
The active U.S. corn seeding pace also weighed on prices.
WHEAT was higher across the board, with the largest gains in Kansas City hard red winter wheat.
U.S. wheat production for 2023/24 was estimated at 1.659 billion bushels by the USDA, which would be up by only nine million on the year and well short of average trade expectations.
U.S. wheat carryout stocks are forecast to tighten to 556 million bushels next year, from 598 million the current marketing year. Pre-report expectations had been for a slight increase in the carryout on the year.
World wheat carryout is forecast to dip to 264.3 million tonnes in 2023/24, from 266.3 million at the close of the current marketing year.
