North American Grain and Oilseed Review: Canola spikes after yesterday’s sell-off

WINNIPEG, March 11 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were stronger on Thursday, with contracts hitting new highs.

In particular, the new crop November contract proved to be the market leader with its volume today outpacing that for either the old crop May or July contracts.

Tight supplies continued to underpin canola values.

A strong global demand for vegetable oils pushed prices up after yesterday’s sell-off. There were sharp hikes in Chicago soyoil, Malaysian palm oil and European rapeseed.

A rising Canadian dollar tempered canola values. At mid-afternoon, the loonie was at 79.73, after closing Wednesday at 79.13.

There were 27,414 contracts traded on Thursday, which compares with Wednesday when 24,034 contracts changed hands. Spreading accounted for 15,004 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 801.50 up 24.80
Jul 753.50 up 18.70
Nov 634.70 up 17.50
Jan 638.40 up 17.90

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Thursday, in a correction from yesterday’s losses.

The United States Department of Agriculture (USDA) reported weekly export sales of soybeans for week ended March 4 were 350,600 tonnes of old crop. That’s an increase of 32 per cent over the previous week. New crop sales tallied to 213,200 tonnes.

Additionally, there was a 40 per cent spike in old crop soymeal sales of 261,600 tonnes. New crop sales came to 18,300 tonnes. Soyoil sales were 4,900 tonnes.

The Rosario Grain Exchange cut its estimate of Argentina’s 2020/21 soybean crop by nearly nine per cent at 45 million tonnes due to ongoing dry conditions.

CONAB upped its forecast of Brazil’s 20/21 soybean crop by almost one per cent at 135.13 million tonnes, despite producers battling continued wet conditions that has delayed the harvest.

Rapeseed production in the European Union was projected to fall by 17 per cent at 14.2 million tonnes in 2021/22.

CORN futures were higher on Thursday, also in a correction from yesterday.

The USDA reported corn export sales were up noticeably from the previous week at 395,500 tonnes of old crop. In addition, new crop sales topped 287,300 tonnes.

The U.S. Environmental Protection Agency is reportedly considering combining biofuel blending limits for 2021 and 2022. Should EPA proceed with this, the result would be quite beneficial to both corn and ethanol producers.

Despite the worst delays in planting Brazil’s second corn crop in a decade, CONAB raised its projection by nearly 2.5 per cent at 108.07 million tonnes. That was based on increases for planted acres and improved yields.

Meanwhile, Safras and Mercado reported domestic consumption of corn in Brazil was at record levels, and the country might need to import corn from Paraguay.

WHEAT futures were weaker on Thursday, as precipitation is bring some relief to dry conditions in the U.S.

The U.S. National Oceanic and Atmospheric Administration (NOAA) called for one to five inches of snow to fall on the Northern Plains in its short range forecast. The same system is to bring rain to the Central Plains and Mississippi River Valley.

The USDA said wheat export sales jumped 50 per cent from the previous week with old crop at 329,500 tonnes. New crop wheat totaled 31,000 tonnes.

Russia reported that 80 per cent of its winter wheat was in good condition, and that the planting of spring wheat will soon begin.

Egypt, the world’s largest wheat importer, purchased 360,000 tonnes from Romania.

The Western Producer

Tags: USDA, canola, soybean futures, North American Grain and Oilseed Review, ICE, soyoil, palm oil, canola futures