North American Grain and Oilseed Review: Canola ends week mixed
WINNIPEG, July 16 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures finished mixed on Friday, with gains in the front months and losses for the more deferred positions.
With the ongoing drought across the Prairies, a trader said that two more weeks of hot and dry weather will severely damage the canola crop. As well, he called for increased price rationing to curb demand. With decreased yields, he suggested rationing must eliminate between four million to five million tonnes of canola, possibly as much as six million.
The weather forecast going through the weekend and into next week, has called for more above normal temperatures across the Prairies with a few scattered showers.
Support for canola came from gains in the Chicago soy complex and Malaysian palm oil. European rapeseed was mixed.
The Canadian Grain Commission reported producer deliveries of canola, for the week ended July 11, amounted to 188,100 tonnes for an increase of almost three per cent over the previous week. Canola exports tumbled nearly 78 per cent at 20,100 tonnes, while domestic usage fell about 13 per cent at 158,700 tonnes.
The Canadian dollar was weaker at mid-afternoon, with the loonie at 79.32 U.S. cents compared to Thursday’s close of 79.54.
There were 14,315 contracts traded on Friday, which compares with Thursday when 17,125 contracts changed hands. Spreading accounted for 5,932 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Canola Nov 917.50 up 5.40
Jan 899.40 up 1.80
Mar 878.80 dn 1.50
May 858.10 dn 2.20
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Friday, as dry conditions in the upper United States Midwest have posed a serious threat to soybean yield potentials. Above normal temperatures and very little rain have been forecast for the region over the coming week.
The U.S. Drought Monitor reported almost 56 per cent of the country is in some state of drought. That includes nearly three-quarters of the U.S. Plains.
CORN futures pulled back on Friday, due to profit-taking.
There are concerns regarding yield potentials in the upper U.S. Midwest as dry conditions have hampered corn crops.
However, Planalytics bumped up its U.S. corn yield estimates by 0.1 bushel per acre to now 175.1 bu/ac. The consultancy forecast yields in Iowa to be 193.9 bu/ac. with Illinois at 196.8 and Indiana at 185.
In Brazil, a number of companies have exited their corn contracts on washout clauses. That has laid the ground for a large wave of export cancellations as the corn is being redirected to domestic use on high price premiums.
With three-quarters of Argentina’s corn crop harvested, the Rosario Grain Exchange raised its production estimate by one per cent at 51 million tonnes. The exchange suggested the 2021/22 crop could reach as high as 54 million tonnes.
WHEAT futures were stronger on Friday, as concerns rise over U.S. weather conditions for spring and winter wheat.
The U.S. Department of Agriculture announced a private sale of 134,000 tonnes of soft red winter wheat to China, with delivery to be during the 2021/22 marketing year.
The Wheat Quality Council has scheduled its spring tour for July 26 to 29.
Planalytics slashed its projections for the U.S. spring wheat crop by 16.4 per cent at 37.8 bu/ac.
Heavy rains and flooding have struck parts of Belgium, France and especially Germany.
On the heels of SovEcon lowering its estimate of the Russian wheat crop, IKAR has followed suit due to dry conditions in parts of the country. The latter consultancy trimmed 2.4 per cent off of its projection to 81.5 million tonnes. That’s 800,000 tonnes under SovEcon’s latest forecast.
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