By Glen Hallick, MarketsFarm
WINNIPEG, July 13 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures finished higher on Tuesday, but down from much larger gains due to profit-taking.
During the overnight session, the November and January positions hit new contract highs when they peaked at the expanded daily limit of C$60 per tonne. That higher limit also opened the way for a sharp jump in trading volumes.
ICE lowered the limit to C$45 per tonne for Wednesday’s trading.
The ongoing hot temperatures and drought on the Prairies has caused a good amount of crop stress, including canola. With already very tight supplies of the Canadian oilseed, price rationing in the market has been attempting to stymie demand. A harvest very likely to fall well short of the initial projections has further compounded the situation.
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Gains in the Chicago soy complex provided additional support for canola, as did increases in European rapeseed and Malaysian palm oil.
Weakness in the Canadian dollar was also supportive, with the loonie at 79.90 U.S. cents at mid-afternoon compared to Monday’s close of 80.19.
There were 32,899 contracts traded on Tuesday, which compares with Monday when 7,329 contracts changed hands. Spreading accounted for 8,464 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Nov 916.80 up 27.80
Jan 907.60 up 26.30
Mar 892.50 up 23.10
May 872.60 up 23.50
SOYBEAN futures at the Chicago Board of Trade (CBOT) were much more subdued on Tuesday, with slight gains after yesterday’s strong upticks.
Heat stress has caused United States soybeans to mature faster than normal, according to a report. Also, soybeans continued to contend with a combination of drought in the western half of the U.S. Midwest and wet conditions in parts of the eastern half.
Soybean and Corn Advisor’s Dr. Michael Cordonnier has kept his projections for 2021/22 U.S. soybean yields in place at 50 bushels per acre. In yesterday’s supply and demand estimates, the U.S. Department of Agriculture (USDA) pegged its yield at 50.8 bu/ac.
China reported its soybean imports for the 2020/21 marketing year should be approximately 100.4 million tonnes. For the upcoming marketing year, China predicted imports to increase to 102 million tonnes. While the USDA agreed with the next marketing year, the department estimated this year’s imports by China to be 98 million tonnes.
Also, China reported its June soybean imports were 10.72 million tonnes. That’s up 11.6 per cent from May’s intake. The increases are linked to China rebuilding its hog industry after being devastated by African swine fever.
The USDA attaché in Argentina reported that country’s 2020/21 soybean crop should come in at 44.5 million tonnes with five million tonnes in exports. The attaché cut both numbers by 500,000 tonnes from previous USDA estimates. Conversely, in yesterday’s supply and demand estimates, the USDA called for a crop of 46.5 million tonnes and exports of 3.7 million tonnes.
CORN futures were higher on Tuesday, as the forecast for the western portion of the U.S. Corn Belt and parts of the Northern Plains has called for 10 days of hot temperatures and little rain.
Cordonnier has also kept his call on U.S. corn yields for 2021/22 at 175.5 bu/ac. In comparison, the USDA projected 179.5 bu/ac.
China’s corn imports for the current marketing year were to reach 22 million tonnes and then drop to 20 million tonnes in 2021/22. The USDA believes they will be 26 million tonnes for this and the next marketing year.
WHEAT futures were mixed on Tuesday, with gains for Minneapolis and losses for Chicago and Kansas City.
The U.S. winter wheat harvest, while slightly behind the five-year average pace, was reported to be of decent quality and yields.
SovEcon lowered its call on Russian wheat production for 2021/22 by 2.7 per cent at 82.3 million tonnes, due to lighter than expected yields in the early going.
France said its 2021/22 soft wheat crop should be about 37.1 million tonnes, up 27 per cent from the current marketing year. Its exports going outside of the European Union are to be 10.5 million tonnes, up 40 per cent from the previous year. Ending stocks were projected to be 3.7 million tonnes.
In international purchases, Turkey bought 50,000 tonnes of wheat so far in a tender that called for 395,000 tonnes, and Japan issued a tender for 119,000 tonnes of wheat.
