North American Grain and Oilseed Review: Attention towards canola turns to new crop, weather

Intercontinental Exchange (ICE) canola futures witnessed strong gains in the new crop months on Wednesday, while old crop July fell to its down limit.

A trader said there has been a tremendous amount of rolling out of that July contract into November after the former exceeded contract highs of over C$1,000 per tonne late last week.

Ample spillover continued to come from sharp gains in the Chicago soy complex, further supported by increases in European rapeseed and Malaysian palm oil.

Dry conditions on the Prairies also have become steadily more supportive of canola. The lack of sufficient rain in the forecast could soon have farmers thinking twice about planting the Canadian oilseed as the dryness presents too much of a gamble.

At mid-afternoon, the Canadian dollar was slightly weaker. The loonie was at 82.57 U.S. cents compared to Tuesday’s close of 82.67.

There were 32,369 contracts traded on Wednesday, which compares with Tuesday when 31,975 contracts changed hands. Spreading accounted for 9,324 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 902.30 dn 30.00
Nov 754.70 up 16.90
Jan 746.10 up 16.90
Mar 731.70 up 15.50

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, prior and after the release of the monthly supply and demand estimates from the United States Department of Agriculture (USDA).

The department kept its old crop soybean ending stocks at 3.27 million tonnes and projected new crop ending stocks of 3.80 million tonnes.

Globally, the USDA raised its world soybean carryout to 91.1 million tonnes for 2021/22, adding 4.5 million to its estimate.

CONAB pegged Brazil soybean production at 135.41 million tonnes, trimming about 131,000 tonnes off its April projection. The USDA called for 136 million tonnes to be produced in 2020/21 and 144 million tonnes in 2021/22.

CORN futures were lower on Wednesday, on expectations of a higher carryout in 2021/22.

The USDA forecast the old crop corn carryover to be approximately 32 million tonnes and that for the new crop at 38.36 million.

Also, the department announced a private sale of 100,000 tonnes of corn to Mexico, with 30,000 tonnes to be delivered during the current marketing year. The remainder is to be scheduled for during the 2021/22 marketing year.

CONAB lowered its call on total Brazil corn production to about 106.40 million tonnes. At 79.78 million tonnes the country’s safrinha crop was cut by 2.81 million as it struggles in dry conditions. Meanwhile, the USDA slashed its projections for Brazil to 102 million tonnes from 109.0 million.

China projected its 2021/22 corn crop to increase by 4.3 per cent over the previous year’s crop, due to increases in planted acres and yields.

WHEAT futures were weaker on Wednesday, due to prospect of rain for the U.S. Northern Plains.

The USDA placed the old crop wheat carryover at 23.73 million tonnes and at 21.07 million for new crop.

The department maintained its projection for the world wheat carryout at about 295 million tonnes in 2020/21.

France lowered its wheat ending stocks by 100,000 tonnes at 1.6 million.

The Western Producer

Tags: canola, North American Grain, Oilseed, new crop