By Glen Hallick, MarketsFarm
WINNIPEG, April 26 (MarketsFarm) – ICE Futures canola contracts were weaker on Friday, with the spread weighing on values. A Winnipeg-based trader commented rolling out of May into July was a major feature.
Also weighing on values were: China’s ban on canola imports from Canada, a huge South American soybean crop, and farmers in the United States switching from corn to planting soybeans this year.
This week’s acreage report from Statistics Canada provided some support. Canola acres were projected to fall by 1.5 million, for 21.3 million acres this year.
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Although the Canadian dollar was rising on Friday, it remained well below 75 U.S. cents. The loonie was approximately 74.30 by midafternoon Friday.
As of Week 38 of the 2018/19 crop year, Canada has exported more than 6.8 million tonnes of canola. That’s 10 per cent less than this time last year.
There were 31,661 contracts traded on Friday, which compares with Thursday when 35,492 contracts changed hands.
SOYBEAN, soyoil and soymeal futures at the Chicago Board of Trade (CBOT) were weaker on Friday. There are concerns regarding a weakened export demand for United States soybeans, according to Mike Jubinville of MarketsFarm Pro.
Last month, China imported nearly 2.8 million tonnes of soybeans from Brazil, up 20 per cent year-over-year. Soybean imports from the United States were about 1.5 million tonnes, approximately half of that in March 2018.
For contrast, Canada last month exported about 205,800 tonnes of soybeans to China compared to about 70,000 tonnes in March 2018.
On Thursday, China warned that pork prices could spike by 70 per cent later this year due to sharp reductions of its hog population. African swine fever has resulted in the culling of approximately 40 million hogs. That number could jump to 200 million, according to a projection from Rabobank. African swine fever is almost always fatal to hogs. China has about half of the world’s hogs.
Also on Thursday, the International Grains Commission (IGC) projected global grain production for the 2019/20 crop year to reach 2.178 billion tonnes. That’s an increase of 3 million tonnes. Ending stocks have been estimated at 611 million tonnes, up by 8 million tonnes.
Soybeans for the current crop year were revised by the IGC to 362 million tonnes, by 3 million. For the 2019/20 crop year, the IGC has called for production to be 361 million tonnes.
CORN futures were up slightly on Friday, as traders were covering large short positions.
The Buenos Aires Grain Commission reported today that 28 per cent of Argentina’s corn crop has been harvested. Production estimates have remained at 46 million tonnes.
The IGC estimated 2019/20 global corn production to hit 1.125 billion tonnes, an increase of 1 million tonnes.
WHEAT futures were mostly weaker on Friday, with losses in Minneapolis and Kansas City. Chicago finished with small gains. Traders have concerns about large domestic and global wheat supplies.
Dry conditions in Saskatchewan and Alberta, along with parts of Montana and North Dakota could affect wheat production. Also, dryness has been forecast for Germany, one of the European Union’s largest grain producers.
Above normal precipitation is expected for Australia’s main wheat-growing areas, ending fears of drought. Also, good precipitations levels are expected for the Black Sea region, boosting its grain production.
The IGC predicted global wheat production for the coming crop year to reach 762 million tonnes, an increase of 3 million tonnes.
