By Glen Hallick, MarketsFarm
WINNIPEG, May 9 (MarketsFarm) – Intercontinental Exchange Futures canola contracts were down on Thursday, but recovered from larger losses earlier in the day.
The July contract closed at C$436.70 per tonne after hitting C$434.00 per tonne at one point in the session. The November contract closed at C$450.30 after it fell to C$447.40.
A trader stated canola prices are still too high, as they are approximately C$20 per tonne more than soybean contracts on the Chicago Board of Trade. Despite canola prices pushing downward over the last few months, the trader said it’s difficult for canola to compete with other oilseeds.
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However, one report said that some traders want to avoid canola prices going any lower until the 2019 crop has been established.
There were 12,297 contracts traded on Thursday, which compares with Wednesday when 17,285 contracts changed hands.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jul 436.70 dn 0.80
Nov 450.30 dn 1.10
Jan 456.70 dn 0.90
Mar 462.70 dn 0.70
SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Thursday, as uncertainty continues to hover over United States/China trade talks.
The July and August contracts fell 14 to 14.5 U.S. cents. Also, there were losses in soyoil and soymeal in trading on Thursday.
The U.S. Department of Agriculture issued its export sales report today, and soybeans were far below market expectations. Approximately 146,500 tonnes of soybeans were sold and almost 44.99 million tonnes so far this crop year. This time last year, about 55.14 million tonnes had been sold.
The United Nations reported today that global meat production will be down for the first time in 20 years. Production for 2019 will drop due to Africa swine fever in China, in which tens of millions of hogs have been culled to help stop the spread of the disease that’s almost always fatal to hogs. Chinese officials ordered testing for African swine fever at the country’s 10,000 slaughterhouses to be completed by July 1.
CORN futures were weaker on Thursday, also due to pessimism towards U.S./China trade talks.
In addition, the USDA reported corn export sales were below expectations. The markets predicted at least 550,000 tonnes, but USDA said 293,500 tonnes were sold. Corn sales to date have amounted to about 46.36 million tonnes, under the 51.46 million tonnes this time last year.
High water in the U.S., especially along the Mississippi and Ohio Rivers has hampered shipping. For the week ending May 4, less than 3.27 million tonnes were shipped on the Mississippi, a decline of 43 per cent from the five-year average. On the Ohio, 3.63 million tonnes were shipped, a drop of 11 per cent from the five-year average.
Movement by rail increased 102 per cent year-over-year with nearly 14,640 cars.
WHEAT futures were weaker on Thursday, with Chicago wheat having incurred greater losses in trading compared to Kansas City and Minneapolis.
Technical selling and spillover from soybeans were responsible for the drop in prices today.
Ahead of the USDA’s supply and demand report, the markets have predicted wheat production to hit 51.98 million tonnes in 2019, and MarketsFarm has estimated 52.5 million tonnes. Both would be higher than 2018’s production of 51.17 million tonnes.
Wheat sales met market expectations for this week. The USDA reported sales of 502,900 tonnes. Also, wheat sales year-over-year are up, with 25.55 million tonnes compared to 23.54 million tonnes.
