By Glen Hallick, MarketsFarm
WINNIPEG, Feb. 3 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were mostly lower on Wednesday, due to weakness in Malaysian palm oil and European rapeseed.
While Chicago soyoil spent a good deal of today’s session lower, it finished with a small gain, along with higher soybeans and soymeal.
Concerns about lower ending stocks continue to underpin canola values. More light will be shed on the issue on Friday when Statistics Canada releases its report on grain stocks as of Dec. 31.
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A Calgary-based analyst stressed that crushers are still making money, which provides support to canola. He said that if things turn sour for the crushers there would be large declines in canola values.
There was an unusual sharp spike in the volume for the November contract, which accounted for almost 32 per cent of today’s total volume. Speculation had it as China acquiring new crop canola contracts, while a Winnipeg-based trader believed it was the selling off of short futures.
At mid-afternoon the Canadian dollar rose by nearly a quarter of a cent. The loonie was at 78.26 U.S. cents after closing Tuesday at 78.02.
There were 41,711 contracts traded on Wednesday, which compares with Tuesday when 18,016 contracts changed hands. Spreading accounted for 16,576 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
May 676.40 dn 1.60
Jul 651.90 up 2.10
Nov 557.20 dn 3.60
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, due the need for price rationing because of declining supplies.
More rain was falling in Brazil and was expected to continue for the next five days, adding to the delays to the country’s soybean harvest as well as the planting of its Safrinha corn crop. A report placed the Brazil soybean harvest at five per cent complete and its corn planting at two per cent finished.
The latest estimates on South American soybean production put Argentina’s at 48 million tonnes and Brazil’s at 133 million.
Soybean exports out of Brazil in January were a mere fraction of what they were a year ago. Exports this January were just short of 49,500 tonnes compared to 1.4 million in January 2020.
The United States Department of Agriculture (USDA) is scheduled to issue its next supply and demand report on Feb. 9 at 11 am Central. It remains to be seen if the USDA will again lower ending stocks for soybeans and corn and increases export projections.
CORN futures were higher on Wednesday, getting spillover from soybeans.
The U.S. Energy Information Administration (EIA) reported ethanol production for the week ended Jan. 29 averaged 936,000 barrels per day (BPD), for an increase of 3,000 BPD over the previous week. Ethanol stocks stood at 24.32 million barrels, which made for the largest inventory since May 2020.
Brazil corn exports in January topped 2.55 million tonnes, which were 450,000 tonnes more than exports during January 2020.
WHEAT futures were higher on Wednesday, also caught up in the spillover from soybeans.
Precipitation of up to a half-inch was forecast for Montana, Idaho, Wyoming, Nevada and Utah today. Although the precipitation won’t alleviate the dry conditions in those states, the moisture would help. Also, rain and snow are forecast to fall over the weekend across an area stretching from western Kentucky to Wisconsin.
The European Union reported wheat exports to non-EU countries were just short of 15 million tonnes so far in the 2020/21 marketing year.
Ukraine said 74 per cent of its 2020/21 wheat export quota of 17.5 million tonnes was filled through Feb. 1.
