North American Grain and Oilseed Review: Canola rises independently

WINNIPEG, Feb. 18 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts hit new highs on Thursday in a show of independent strength, amid a volatile market.

Canola made gains despite declines in the Chicago soy complex and in Malaysian palm oil.

Price rationing was the main driver, as canola ending stocks continue to tighten.

A Winnipeg-based trader said it’s likely that canola exports are slowing more than they usually do at this time. However, such won’t be confirmed until the Canadian Grain Commission issues its February export report – two months from now.

At mid-afternoon the Canadian dollar was higher at 78.81 U.S. cents, after closing Wednesday at 78.67.

There were 30,788 contracts traded on Thursday, which compares with Wednesday when 20,453 contracts changed hands. Spreading accounted for 13,894 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 726.90 up 9.30
Jul 695.10 up 9.50
Nov 583.40 up 4.70
Jan 584.90 up 5.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Thursday, as the United States Department of Agriculture (USDA) released its preliminary estimates for planted acres in 2021.

Soybean acres were forecast at 90 million compared to 83.1 million in 2020. While these are ‘armchair estimates’ that lack the usual farmer surveys, the numbers provide the markets with some direction. The USDA is scheduled to release its first official report on acreage on March 31.

The USDA postponed its weekly export sales report to Friday 7:30 Central due the Presidents’ Day holiday this week.

Drier conditions are helping the soybean harvest in the southern growing areas of Brazil. However, rain persists in the northern regions, further delaying the harvest.

Canola production in Australia is projected to skyrocket 74 per cent from 2019/20, putting the 2020/21 harvest at 4.1 million tonnes.

CORN futures were slightly lower on Thursday in sympathy with soybeans.

The USDA pegged 2021 corn acres at 92 million compared to the 90.8 million last year.

The Energy Information Administration reported ethanol production in the U.S. was 911,000 barrels per day for the week ended Feb. 12. That’s down 12.4 per cent from a year ago.

As with the soybean harvest in Brazil, corn planting is proceeding in the south while rain stymies operations in the north.

WHEAT futures were stronger on Thursday, due reports of cold weather and a reduction in U.S. spring wheat acres.

It’s believed that spring wheat in the U.S. is likely to lose out to additional acres of corn and soybeans in 2021.

Unusually cold temperatures in the U.S. are giving way to warmer weather. However, concerns about winterkill remain for the country’s winter wheat crops. Also, the cold has limited barge shipments on the Mississippi, Missouri and Ohio Rivers.

Frigid temperatures have continued to plague the Black Sea region, threatening its winter crops.

The Western Producer

Tags: canola, North American Grain and Oilseed Review, ICE