North American Grain and Oilseed Review: Canola comes back from sharp declines to finish mixed

Losses for U.S. soybeans, corn, winter wheats

By Glen Hallick, MarketsFarm

WINNIPEG, July 22 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures finished mixed on Thursday, after prices remained much lower for most of the session.

The turnaround followed the release of the weekly crop report from Saskatchewan Agriculture, which stated the province’s crops continued to struggle under drought conditions. Province-wide, the canola rated only 18 per cent good to excellent, which was countered by 46 per cent poor to very poor.

Those areas of the Prairies that received rain over the last few days have seen crop stabilize, but improvements are extremely unlikely at their current stages of development.

With traders liquidating their long positions, profit-taking weighed on canola values. As did declines in the Chicago soy complex and European rapeseed and Malaysian palm oil.

The Canadian dollar was higher at mid-afternoon, with the loonie at 79.60 U.S. cents compared to Wednesday’s close of 79.43.

There were 19,921 contracts traded on Thursday, which compares with Wednesday when 23,679 contracts changed hands. Spreading accounted for 5,964 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 881.30 up 1.40
Jan 866.70 dn 0.40
Mar 850.40 dn 1.60
May 831.70 dn 1.00

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Thursday, following the release of the weekly export sales report from the United States Department of Agriculture (USDA).

For the week ended July 15, the USDA reported exports sales of soybeans of 62,000 tonnes of old crop and 176,300 tonnes of new crop. Soymeal export sales slipped three per cent at 68,300 tonnes of old crop, a marketing year low. New crop came to 19,100 tonnes. Soyoil tallied 700 tonnes.

Market consultancy Patria Agronegocios has projected Brazil’s 2021/22 soybean crop to increase by six per cent at 144.7 million tonnes, with acres expanding seven per cent at 100.94 million. In comparison, the USDA has forecast production at 144 million tonnes.

Record low water levels on the Parana River in South America is posing a challenge to shipping, especially for the Argentine Port of Rosario. Also in South America, there have been growing concerns of a second La Nina forming, which would likely continue the dry conditions parts of Brazil and Argentina.

CORN futures were lower on Thursday, caught up in spillover from soybeans.

Weekly U.S. corn export sales incurred a net reduction of 88,500 tonnes of old crop. New crop sales were 47,700 tonnes.

Ethanol production in the U.S. increased by 13,000 barrels per day (BPD) at nearly 1.03 million BPD, according to the latest report from Energy Information Administration (EIA). Ethanol stocks expanded 1.38 million barrels at 22.52 million.

Frost is again expected to hit Brazil corn crops.

The USDA attaché in India estimated that country’s corn exports to increase to 2.8 million tonnes due to India’s lower prices.

WHEAT futures were mixed on Thursday, with Minneapolis spring wheat overcoming earlier losses to close on the plus side. Chicago soft wheat and Kansas City hard red wheat were significantly lower.

Scattered showers and temperatures pushing into the 100 degrees Fahrenheit were forecast for the U.S. Northern Plains – further intensifying conditions across the drought stricken region.

U.S. wheat export sales rose 11 per cent over the week, coming to 473,200 tonnes. There were also sales of 5,000 tonnes for 2022/23.

The USDA attaché in Canada pegged that country’s wheat yields at 50.05 bushels per acre, the official department call at 51.6 bu/ac. The attaché stressed the estimate is likely to be reduced further due to the drought across the Prairies and the survey-based Statistics Canada report due Aug. 30.

Flooding in the European Union and China is likely to cut into their respective wheat production. The heavy rainfall has also curtailed loading operation at a number of Black Sea terminals, including the Ukraine’s Port of Odessa.

Futures Prices as of July 22, 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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