By Glen Hallick, MarketsFarm
WINNIPEG, May 7 (MarketsFarm) – Intercontinental Exchange Futures canola contracts were stronger on Tuesday, as the oversold market was due for a bounce.
One of the major reasons for the bounce on Tuesday was the reopening of markets in Japan after a week-long holiday. The markets were closed last week to mark the change in Japan’s emperors.
Also providing support today were upticks in palm oil and rapeseed, plus planting in Canada, which is now in full swing.
Canadian canola growers are faced with the largest stocks for March, according to Statistics Canada. On Tuesday, the federal agency released its grain and oilseed stocks as of March 31. Stocks increase by 10.5 per cent year-over-year to a record 10 million tonnes and a record 8.8 million tonnes on the farms. The reason for the larger stocks is China has not purchased any canola from Canada since the end of 2018.
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A trader stated the Statistics Canada report met market expectations and had little, if any, effect on prices today.
There were 19,092 contracts traded on Tuesday, which compares with Monday when 22,218 contracts changed hands.
Price Change
Canola Jul 438.30 up 5.90
Nov 451.40 up 5.50
Jan 457.80 up 5.60
Mar 463.60 up 5.70
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Tuesday, due to optimism towards United States/China trade talks resuming in Washington tomorrow.
Negotiations were almost derailed following a tweet by U.S. Donald Trump in which he threatened to hike tariffs on imports from China. Trump took Twitter after China indicated it wanted to backtrack on provisions agreed upon in talks from last week. China threatened to pull its lead negotiator, Vice Premier Liu Hu. However Liu will make the trip, which signals how serious China is at wanting to reach a deal to end the trade war with the U.S.
The U.S. Department of Agriculture reported six per cent of soybeans have been planted, under half of the five-year average of 14 per cent.
The expected increase in soybean acres in the U.S. has put farmers there in a tough predicament. As they are turning to planting soybeans instead of corn due to wet conditions, they are faced with a soybean glut. Stocks in the U.S. are at record levels unseen since the 1980s.
Three cases of African swine fever were recently found in South Africa. The devastating disease for hogs already has wrought havoc on China’s hog industry and is also present in Vietnam and parts of Eastern Europe.
Brazil’s exports of soybeans to China were down almost three per cent in April, largely due to African swine fever which has eroded China’s demand for oilseeds.
CORN futures were stronger on Tuesday as the pace of planting has been slow due to cold and wet conditions.
The USDA reported 23 per cent of corn has been planted as of May 5. The five-year average is 46 per cent.
Argentina exported almost 3.1 million tonnes of corn at this point, for a 59 per cent increase year-over-year. The country’s corn production this crop year is projected to reach close to 46 million tonnes.
WHEAT futures were stronger on Tuesday, with gains due technical buying on winter wheat and the slow pace of planting spring wheat.
The USDA reported 22 per cent of spring wheat has been planted nationally, with only 13 per cent in North Dakota. Both numbers are well under their five-year averages.
The U.S. winter wheat crop has been rated at 64 per cent good to excellent condition. The yields have been estimated to be 48.5 bushels per acre.
