By Glen Hallick, MarketsFarm
WINNIPEG, May 8 (MarketsFarm) – Intercontinental Exchange Futures canola contracts were down slightly on Wednesday, after being up for most of the session. Bids fell in the final 30 minutes of trading, which ended a rally that began yesterday.
At one point on Wednesday, the July contract reached a high of C$444.90 per tonne, but ended the day at C$438.50 per tonne.
Weighing on bids were weaker soybean prices on the Chicago Board of Trade, the strong potential for increased soybean acres in the United States and South America’s large soybean harvest.
Read Also
North American Grain/Oilseed Review: Canola rises, down day for grains
Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange were higher on Friday despite weakness in most comparable…
Added to that are record levels for Canadian canola stocks for March at more than 10 million tonnes, according to Statistics Canada. Of the stocks, about 88 per cent of canola remains in farmers’ bins.
At the World Trade Organization on Tuesday, Canada demanded China produce its evidence that canola shipments from Richardson International and Viterra were contaminated. China has yet to respond to Canada’s request to send a scientific delegation to discuss the matter.
Canada’s demand did provide something of a psychological bounce, as did a seeding rally on Wednesday.
Cool, wet weather has slowed spring planting across Canada, and of what has been planted, very little has sprouted. If conditions fail to improve, there becomes the possibility for problems further down the road.
There were 17,285 contracts traded on Wednesday, which compares with Tuesday when 19,092 contracts changed hands.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jul 438.50 dn 0.80
Nov 451.40 unchanged
Jan 457.60 dn 0.20
Mar 463.40 dn 0.20
SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Wednesday, as a dark cloud is hovering over United States/China trade talks.
Following China’s attempt to change numerous provisions of the deal already agreed to, U.S. President Donald Trump stated he will hike tariffs on imports from China from 10 to 25 per cent on Friday.
In light of numerous reports of China’s demand for soybeans on the wane, the country’s imports actually increased in April. The reason being, a cut to China’s value-added tax that took effect on April 1. Several shipments were held off until the tax cut. In April, China imported well over 7.6 million tonnes of soybeans, up from the 6.9 million tonnes in March. However, China’s imports are expected to fall in May and June.
Ahead of the U.S. Department of Agriculture’s (USDA) monthly supply and demand report, the markets are expecting U.S. soybean production for the 2019/20 crop year to be 114.305 million tonnes.
For South America, USDA’s forecast is expected to call for soybean production in Brazil for the current crop year to be 117.0 million tonnes and Argentina’s crop to be a 55.710 million tonnes.
CORN futures were weaker on Wednesday also due to the uncertainty surrounding trade talks.
It’s expected the USDA will peg the 2019/20 U.S. corn crop at 376.800 million tonnes. For the current crop year, the USDA’s forecast for Brazil’s corn production to be 96.702 million tonnes and Argentina’s crop at 48.008 million tonnes.
U.S. ethanol production was up last week at 1.036 million barrels, slightly above the five-week average of 1.018 million barrels.
WHEAT futures were weaker on Wednesday, due to technical selling and large stocks both domestic and globally.
SovEcon kept its estimate for Russia’s wheat production for 2019 at 83.388 million tonnes.
The Philippines issued a tender for 54,431 tonnes of wheat that’s to be shipped between July and September.
Jordan reissued a previous tender for 120,000 tonnes of wheat.
South Korea purchased about 650,000 tonnes of feed wheat.
