North American Grain and Oilseed Review: Canola falls back as Chicago rises on South American concerns

Intercontinental Exchange (ICE) Futures canola contracts were mostly lower on Wednesday, due to profit-taking and the liquidation of the soon-to-expire January contract.

With the holidays fast approaching, volatility has entered the market. With Thursday being Christmas Eve, the markets will close early at noon Central. ICE will reopen on Dec. 29.

A trader noted that the cash market remains strong with canola going for C$14 per bushel at several locations across the Prairies.

At mid-afternoon the Canadian dollar weighed on canola values, with the loonie at 77.75 U.S. cents, compared to Tuesday’s close of 77.47.

There was strong spillover support from gains in the Chicago soy complex and Malaysian palm oil. European rapeseed was mixed.
Statistics Canada reported the November canola crush came to 917,992 tonnes. That produced 395,613 tonnes of oil and 523,140 tonnes of meal. The federal agency also reported all grain deliveries in November of nearly 5.19 million tonnes, of which almost 1.87 million tonnes was canola.

There were 46,403 contracts traded on Wednesday, which compares with Tuesday when 23,852 contracts changed hands. Spreading accounted for 34,058 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 623.90 dn 14.80
Mar 620.80 dn 7.30
May 610.10 dn 2.40
Jul 596.10 dn 0.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, due to a number of issues in South America.

AgriCensus, an independent price report agency, stated Brazil has essentially run out of soybeans for export. At about 119,750 tonnes, this month’s soybean exports will be the smallest amount in six years. In December 2019 Brazil exported 2.50 million tonnes.

Aprosoja, an association of grain growers in Brazil, cut its estimate of the country’s 2020/21 soybean crop by 1.6 per cent to 127 million tonnes.

The strike by grain inspectors and oilseed workers in Argentina entered its 14th day. More than 100 vessels were reported to be lined up as the country’s farm exports have been cut to a trickle.

The United States Department of Agriculture (USDA) issued its weekly export sales report, a day early, with 20/21 soybean sales of 352,800 tonnes along with 21/22 sales of 165,000 tonnes as of Dec. 17. The old crop sales dropped 62 per cent from the previous week, hitting a marketing year low. Soymeal export sales were 223,700 tonnes and soyoil sales were 20,900 tonnes.

CORN futures were higher on Wednesday, also due to market concerns towards South America.

Corn-growing areas of Argentina remain short on precipitation, receiving only 70 per cent of normal rainfall over the last 30 days. Meanwhile, conditions in Brazil have improved.

The Energy Information Administration reported ethanol production increased by an average of 19,000 barrels per day (BPD) bringing it to 976,000 BPD. Inventories rose to 23.2 million barrels.

Export sales of corn also hit a marketing year low at 651,100 tonnes, and fell 66 per cent compared to the previous week.

November corn exports out of South Africa were about 1.96 million tonnes. The country’s corn ending stocks are pegged at 6.25 million tonnes.

WHEAT futures were higher on Wednesday, due to spillover from soybeans.

Wheat export sales tallied 393,700 tonnes of old crop and 24,000 tonnes of new crop. The 20/21 sales were down 27 per cent from the previous week.

China’s wheat imports were just over 800,000 tonnes in November. Its year-to-date imports are more than 7.48 million tonnes, a jump of 150 per cent compared to November 2019.

The Western Producer

Tags: North American Grain and Oilseed Review, Canola falls back