North American Grain and Oilseed Review: Canola remains on upward swing

CBOT: Fund money produces double-digit gains

By Glen Hallick, MarketsFarm

WINNIPEG, April 14 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were higher on Wednesday, but finished off of their highs. Gains in the old crop months were stronger than those for the new crop positions.

A Calgary-based analyst said a great deal of fund money has been coming in to the North American markets. However, he added there will be a great amount of volatility over the coming months with sharp price swings.

Canola received spillover support from strong gains in the Chicago soy complex, along with additional help from increases in Malaysian palm oil and European rapeseed.

Tight old crop supplies remained a supportive feature for the Canadian oilseed, as well as the continuing dry conditions on the Prairies for new crop values. The varied amount of precipitation received this week was somewhat helpful, the analyst said, but it’s far from enough to curb the dry conditions across much of the region.

After briefly flirting with 80 U.S. cents, the Canadian dollar was at 79.85 at mid-afternoon, compared to Tuesday’s close of 79.66.

There were 24,477 contracts traded on Wednesday, which compares with Tuesday when 21,366 contracts changed hands. Spreading accounted for 11,040 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 827.20 up 10.00
Jul 755.70 up 13.50
Nov 638.90 up 6.40
Jan 638.70 up 4.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, benefitting from the influx of fund money.

Ahead of the weekly export sales report from the United States Department of Agriculture on Thursday, market expectations call for old crop soybeans to be minus 100,000 to plus 200,000 tonnes. New crop sales are projected to be under 500,000 tonnes.

Ahead of the monthly crush report from the National Oilseed Processors’ Association (NOPA) on Thursday, average market guesses call for 179.2 million bushels of soybeans to have been crushed in March.

CONAB placed the Brazil soybean harvest at 85 per cent, which was a six-point gain over the previous week.

CORN futures were stronger as well on Wednesday, catching spillover from soybeans.

The trade placed old crop corn export sales for tomorrow to be 500,000 to 900,000 tonnes. New crop sales are thought to come below 300,000 tonnes.

The Energy Information Administration (EIA) reported U.S. ethanol production dropped by 34,000 barrels on the week to 941,000 barrels per day (BPD). However that’s 371,000 BPD less from a year ago, when the COVID-19 pandemic struck the U.S.

CONAB pegged the harvest of the first corn crop in Brazil at 59 per cent complete, and the planting of the second corn crop just short of 100 per cent finished.

Ethanol production in Brazil jumped 58 per cent in March and April, and is expected to increase by another 25 per cent this year. A switch from sugar cane to corn in Mato Grasso is behind the increase.

WHEAT futures were significantly higher on Wednesday, on spillover from soybeans and corn.

The precipitation that fell on North Dakota was reported as not being enough to alleviate the state’s dry conditions. North Dakota received the equivalent of a half inch of moisture. The U.S. weather forecast has called for an inch of rain Nebraska, Colorado, Kansas, Oklahoma and Texas. Meanwhile the Eastern Corn Belt is expected to get less than a quarter of an inch of rain.

Trade projections place wheat export sales at 50,000 to 200,000 of old crop, along with 300,000 to 500,000 tonnes of new crop.

France bumped up its 2020/21 wheat export projections by 1.3 per cent at 7.55 million tonnes.

Futures Prices as of April 14, 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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