By Glen Hallick, MarketsFarm
WINNIPEG, Aug. 28 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were higher on Friday, bouncing back from losses for most of the trading session.
A trader speculates that canola combining has been picking up momentum in several areas of the Prairies, which would add some harvest pressure. However, he noted that yields, so far, have not been as good as expected a month ago.
There was some pressure from small declines in Chicago soyoil and European rapeseed. Gains in Malaysian palm oil provided a measure of support.
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At mid-afternoon, the Canadian dollar was slightly higher at 76.32 U.S. cents, compared Thursday’s close of 76.17.
The Canadian Grain Commission reported producer deliveries of canola were 252,700 tonnes for the week ended Aug. 23. That’s down 22.6 per cent from the previous week Canola exports amounted to 167,500 tonnes and up nearly four per cent. Domestic usage fell 72.9 per cent at 5,800 tonnes.
Statistics Canada reported farm cash receipts for the second quarter of 2020 at C$16.7 billion. That’s an increase of 5.2 per cent, with gains in lentils, canola and cannabis. Saskatchewan led the country with crop receipts of C$927.0 million, followed by Alberta at C$197.0 million. Manitoba incurred the largest decline, losing C$39.5 million.
There were 27,420 contracts traded on Friday, which compares with Thursday when 27,033 contracts changed hands. Spreading accounted for 7,224 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Nov 499.10 up 1.90
Jan 507.10 up 2.10
Mar 512.80 up 1.80
May 516.90 up 0.90
SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Friday, as adverse crop conditions provided support.
The United States soybean crop is suffering from hot and dry weather. Heavy rains, stemming from Hurricane Laura, have been forecast for the northern Delta and southern Midwest, which can help soybeans in the late stages of development. The rain could move into Nebraska, Iowa, Illinois and Indiana during the weekend.
Market expectations for the Statistics Canada report on principal field crops, to be released on Aug. 31, pegged 2020 canola production at 20.0 million tonnes. Soybeans are projected to be 6.1 million tonnes.
The International Grain Council (IGC) released its monthly production estimates on Thursday. The IGC is increasing its projection for global soybean production to 373 million tonnes in 2020/21, with the carryover holding at 288 million.
A labour dispute in Argentina was averted yesterday, when the government agreed to negotiate with the labour union representing port workers. The workers are unhappy with low wages and high inflation.
CORN futures were steady to higher on Friday, benefitting from a private sale.
The U.S. Department of Agriculture announced a private sale of 324,032 tonnes of corn to unknown destinations. Delivery is for during the 2020/21 marketing year.
There have been reports suggesting the crop damage in Iowa from the derecho earlier this month is more severe than initially estimated. The powerful wind storm cut corn ratings in Iowa to about 50 per cent good to excellent condition. The next weekly crop report from the USDA is due Monday afternoon.
Trade predictions slotted Canadian corn production for 2020 at 14.3 million tonnes.
The European Union cut its 20/21 usable corn production estimate by 3.2 per cent to 70.2 million tonnes.
FranceAgriMer said the French corn crop was at 62 per cent good to excellent condition, holding from the previous week. Dry conditions and heat stress have affected the crop this year.
The IGC pegged global corn production at nearly 1.17 billion tonnes in 20/21. That’s an increase of 2 million tonnes from the council’s July report.
WHEAT futures were steady to lower on Friday, with Kansas City unchanged, and small losses in Chicago and Minneapolis.
The markets expect total Canadian wheat production to reach 35.4 million tonnes, including 6.5 million tonnes of durum.
The IGC added another 1.0 million tonnes to its world wheat production forecast, bringing it to 763 million tonnes. Global wheat ending stocks are expected to be 294.0 million tonnes.
The EU reduced its estimate of its 2020/21 wheat crop by nearly 2.7 per cent to 113.5 million tonnes. Exports are projected to fall by 1.0 million tonnes to now 24.0 million.
Germany said its 2020/21 wheat crop will be down by 5.1 per cent to almost 21.9 million tonnes.
Wheat yields in Argentina could plummet by as much as 50 per cent in 2020 due to extended dry condition in northern and central growing areas, plus unusually strong frosts and pest issues.
