North American Grain and Oilseed Review: Extradition ruling pushes July canola into the red

U.S./China tensions loom over markets

By Glen Hallick, MarketsFarm

WINNIPEG, May 27 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were mixed on Wednesday, with the July contract lower and the new crop months with reduced gains. All contracts were higher until the ruling on the extradition of Huawei executive Meng Wanzhou.

Associate Chief Justice Heather Holmes, of the British Columbia Supreme Court, ruled the extradition hearing for Meng will proceed. Holmes agreed with the prosecution that the Huawei executive stands accused of fraud, which meets the double criminality requirement. The defence argued Meng was accused of violating United States sanctions against Iran, which isn’t necessarily a crime in Canada.

With canola exports to China severely curtailed this year, although canola oil exports have been strong, the markets will now see what punitive measures China could take against Canada.

After a 90-point gain yesterday, the Canadian dollar was slightly higher at mid-afternoon. The loonie was at 72.56 U.S. cents compared to Tuesday’s close of 72.44.

Manitoba farmers were reported to be about two-third finished their spring planting. Despite a strong gain from last week, farmers remain behind the average pace due to wet conditions in several areas of the province.

There were 17,774 contracts traded on Wednesday, which compares with Tuesday when 19,729 contracts changed hands. Spreading accounted for 10,584 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 463.50 dn 1.30
Nov 472.30 up 0.40
Jan 478.90 up 0.50
Mar 484.40 up 0.10

SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly higher on Wednesday, as tense United States/China relations tempered further gains.

Tensions between the two countries could be ramped up further as U.S. President Donald Trump said there will likely be action taken against China when it imposes new security laws on Hong Kong. Despite the COVID-19 pandemic, pro-democracy demonstrations have continued in the former British colony. One possible move could see the U.S. ending Hong Kong’s favoured trading status. The markets are concerned that strained U.S./China relations could see the Phase One trade deal fall apart.

The U.S. Department of Agriculture (USDA) issued its weekly crop progress report yesterday. Soybean planting reached 65 per cent complete with 35 per cent emerged as of May 24.

The USDA announced a private sale today of 138,000 tonnes of soymeal to the Philippines. Delivery is scheduled for the current marketing year.

The International Grains Council (IGC) is scheduled to issue its monthly production report on Thursday. In April, the IGC projected total global grain and oilseed production at 2.218 billion tonnes, up slightly from its March estimate.

CORN futures were also slightly higher on Wednesday due weather concerns for the U.S. Corn Belt.

The region was forecast to receive hot, dry weather for the next two weeks. That could stress corn in states that have already

The USDA reported corn planting hit 88 per cent finished, with 64 per cent emerged. The crop rated 70 per cent good to excellent.

Agroconsult in Brazil lowered its estimate of that country’s second corn crop by four per cent to 71.7 million tonnes due to dry conditions.

WHEAT futures were mixed on Wednesday, with Chicago and Minneapolis incurring losses while Kansas City was up.

A slightly weaker U.S. dollar has appealed to importers looking to purchase U.S. wheat.

The USDA said spring wheat planting hit 81 per cent complete, with 51 per cent emerged. The winter wheat crop was 68 per cent headed out and rated 51 per cent good to excellent. The harvesting of winter wheat was underway in Texas and was about 27 per cent complete.

Futures Prices as of May 27, 2020

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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