North American Grain and Oilseed Review: Downturn in soyoil takes canola with it

Intercontinental Exchange (ICE) canola futures closed lower on Tuesday due weakness in Chicago soyoil. Small to moderate losses in Malaysian palm oil and European rapeseed also weighed on canola values.

Support for the Canadian oilseed came from sharp upticks in Chicago soybeans and soymeal. As well, the need to ration demand because of tight canola supplies underpinned values.

As the United States dollar held its strength, the Canadian dollar was lower at mid-afternoon. The loonie was at 77.81 U.S. cents, compared to Monday’s close of 78.18.

There were 22,476 contracts traded on Tuesday, which compares with Monday when 21,903 contracts changed hands. Spreading accounted for 15,610 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,000.50 dn 9.30
Mar 979.20 dn 4.80
May 942.40 dn 5.00
Jul 891.20 dn 4.80

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger along with soymeal on Tuesday, but soyoil was down hard.

The trade is expecting tomorrow’s report from the National Oilseed Processors’ Association to come in at around 181.6 million bushels, plus 1.9 billion pounds of soyoil.

Coceral projected total rapeseed production in the European Union and the United Kingdom to be 20 million tonnes in 2022/23, up 8.1 per cent from the previous year.

Consultancy IMEA estimated that 46.4 per cent of the soybeans in Mato Grasso, Brazil have already been sold. That’s down from the 66.4 per cent a year ago and the 49 per cent average. Meanwhile, AgRural said about 96 per cent of Brazil’s soybeans have been planted.

Dr. Michael Cordonnier of Soybean & Corn Advisor maintained his forecast on soybean production in Brazil at 144 million tonnes, despite concerns about dryness in the southern regions. He also kept his projection for Argentina at 50 million tonnes.

India announced it won’t extend its Jan. 31 deadline for GMO soymeal imports, stating the 1.2 million-tonne quota might not have been used.

CORN futures were higher on Tuesday, riding spillover from soybeans

Cordonnier cut his forecast on Brazil corn production for 2021/22 by one million tonnes at 116 million, but he maintained his call for Argentina at 53 million tonnes.

Coceral bumped its call on total EU/UK corn production for 2022/23 at 66.4 million tonnes, nudging up 0.15 per cent from a year ago.

Ukraine said its corn exports for 2021/22 could reach 30.9 million tonnes.

WHEAT futures were narrowly mixed on Tuesday, with small losses for Chicago and Kansas City and a small gain for Minneapolis.

SovEcon reported it has added 100,000 tonnes to its projection of Russian wheat production in 2021/22, bringing their call to 75.4 million tonnes. The Russian Ag Ministry has predicted 76 million tonnes and the USDA called for 75.5 million.

Russia is said to be negotiating with Egypt for a joint-owned storage facility in the latter country for one million tonnes of Russian wheat.

Coceral forecast total EU/UK wheat production for 2022/23 at 139.8 million tonnes, down 2.4 per cent from the previous year.

Ukraine reported its wheat exports for 2021/22 are to be around 24.5 million tonnes.

The Western Producer

Tags: soybean futures, corn futures, palm oil, canola futures, wheat futures, soymeal