Riding optimism in U.S. soy
By Glen Hallick, MarketsFarm
Glacier FarmMedia MarketsFarm – Most canola futures on the Intercontinental Exchange ended Monday on a slightly higher note, after earlier increases largely faded away. The more deferred positions saw their gains turn into losses.
Canola was stronger on the likelihood of a United States/China trade deal and the possibility of some positive movement in trade relations between Canada and China. However, it appears the market developed a wait-and-see approach.
Coupled with that are Canada’s sluggish canola exports and growing indications this year’s canola harvest will easily exceed the 20.03 million tonnes forecast by Statistics Canada.
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There was ample spillover from strong gains in the Chicago soy complex plus increases in European rapeseed. Malaysian palm oil was lower on the day.
Crude oil struggled on Monday, forfeiting earlier increases to turn slightly lower, which took support away from the vegetable oils.
While the January canola contract remained ahead of its 20-day moving average, it inched back from its 50-day average.
The Canadian dollar was higher Monday afternoon at 71.46 U.S. cents compared to Friday’s close of 71.36.
There were 51,826 contracts traded on Monday, compared to 53,260 on Thursday. Spreading accounted for 30,228 contracts traded.
Prices are in Canadian dollars per metric tonne:
Price Change
Canola Nov 619.20 up 1.70
Jan 634.00 up 1.50
Mar 645.90 up 0.70
May 656.20 dn 0.20
SOYBEAN futures at the Chicago Board of Trade were stronger Monday, following developments between the United States and China.
The two countries reached an agreement on a potential trade deal on Monday. Presidents Donald Trump and Xi Jinping are to meet at the APEC summit in South Korea later this week. Reports said China could resume buying U.S. soybeans and other commodities within a month.
As the U.S. government shutdown continued, very few reports will be issued by the Department of Agriculture. One analyst suggested the shutdown might not be resolved until Thanksgiving next month.
The USDA export inspections report has continued to be released, with soybeans for the week ended Oct. 23 falling to 1.06 million tonnes from 1.59 million. The year-to-date of 6.72 million tonnes remains far behind 10.64 million this time last year.
AgRural put soybean planting in Brazil at 36 per cent complete.
CORN futures were higher on Monday, on spillover from soy although losses in crude oil tempered the upside.
A Reuters report said U.S. farmers are poised to harvest their largest corn crop on record, expected to be around 424.20 million tonnes. However, the massive crop will likely drive down corn prices.
The U.S. weather forecast said there’s to be rain for the central and eastern Corn Belt this week, with the region’s western and northern areas to see small amounts of precipitation. Temperatures are to hold around normal as November approaches.
U.S. corn export inspections came to 1.19 million tonnes, down from 1.32 million the previous week. Cumulative inspections reached 10.53 million tonnes compared to 6.67 million a year ago.
AgRural estimated corn planting in Brazil to be 55 per cent done.
The Buenos Aires Grain Exchange placed corn planting in Argentina at 34 per cent finished.
WHEAT futures were higher on Monday, with spillover from soy and corn.
The USDA reported wheat export inspections fell to 258,543 tonnes from 493,487, with cumulative inspections of 11.46 million tonnes versus 9.59 million last year.
The seeding of France’s wheat crop jumped 30 points at 57 per cent complete.
The BAGE pegged the planting of Argentina’s wheat crop at five per cent done.
