WINNIPEG — The ICE Futures canola market struggled to find direction before Monday’s close despite lower crude oil prices.
European rapeseed was lower on Monday, while Malaysian palm oil was mixed. Crude oil prices were declining due to quieter trade activity and a correction in the market after rallying over the past week.
At mid-afternoon, the Canadian dollar was up less than one-tenth of a U.S. cent from Friday’s close.
About 11,880 canola contracts were traded on Monday, which compares with Friday when 34,094 contracts changed hands. Spreading accounted for 8,044 of the contracts traded.
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The Chicago Board of Trade (CBOT) was closed on Monday due to Martin Luther King Jr. Day, leaving traders with plenty to consider when it re-opens this evening.
Last Thursday, the United States Department of Agriculture (USDA) released its monthly supply/demand estimates, which showed the 2022 domestic CORN production at 13.73 billion bushels, down 200 million from the USDA’s December estimate. This resulted in carryout being tightened by 15 million bushels to 1.242 billion, almost a 10-year low.
However, slow U.S. exports and ethanol production are putting pressure on corn prices.
Meanwhile, severe drought conditions in Argentina are also affecting corn production in that country, as well as worldwide.
Estimated U.S. SOYBEAN production was also cut by the USDA with a 70 million bushel decline to 4.276 billion. Projected carryout for soybeans was reduced by 10 million bushels to 210 million. The trade had expected both production and carryout to rise prior to the report’s release.
While drought is also affecting Argentina’s soybean crop, Brazil is projected to have a bumper crop estimated at 152 million tonnes. The Brazilian trade group ANEC is reporting sales from Brazil into Argentina.
The trade is expecting tomorrow’s National Oilseed Processors Association (NOPA) soy crush report to show a monthly crush of nearly 183 million bushels in December, with crush margins staying bullish.
The USDA kept its WHEAT production estimate unchanged at 1.65 billion bushels in last Thursday’s report, while ending stocks were projected to be 567 million bushels, down four million from the December estimate.
Despite this, U.S. winter wheat acres increased, but crop production and quality remains questionable.
Worldwide wheat production was on the rise, according to the International Grains Council (IGC), with Russian and Australian wheat crops expected to offset declines from other countries.
