North American Grain and Oilseed Review: More profit-taking drives canola lower

WINNIPEG, March 18 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were weaker on Thursday, as another round of profit-taking weighed on values.

There was significant weakness in the Chicago soy complex, especially soyoil which lost more than one cent per pound. European rapeseed and Malaysian palm oil also incurred declines.

A trader warned there could be more profit-taking in Chicago soyoil as the funds have an extremely large amount money invested. Should any further profit-taking in soyoil accelerate, that too will drive down canola.

At mid-afternoon a lower Canadian dollar was hovering around the 80-cent mark. The loonie was at 79.97 U.S. cents compared to Wednesday’s close of 80.22.

There were 29,544 contracts traded on Thursday, which compares with Wednesday when 29,552 contracts changed hands. Spreading accounted for 17,340 contracts traded.

There was no final settlement by 2 pm CDT. Prices are in Canadian dollars per metric tonne.

Price Change
Canola May 753.80 dn 25.50
Jul 709.20 dn 22.40
Nov 610.30 dn 14.20
Jan 612.00 dn 13.30

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Thursday, due in part to a lack of fresh news.

Improved weather in Brazil and Argentina was helping their soybean crops, which weighed heavily on CBOT prices.

The United States Department of Agriculture (USDA) issued its weekly export sales report and for the week ended March 11, old crop soybean sales came to 202,400 tonnes. That’s a drop of 42 per cent from the previous week. Soymeal sales amounted to 234,600 tonnes of old crop and only 300 tonnes of new crop. Soyoil sales were 19,100 tonnes.

The Ministry of Agriculture in China said it’s looking for ways to replace soybeans and corn in feed rations due to high prices. However, the market is rather skeptical of China being able to reduce quantities while acquiring alternatives.

Argentina reported that more than 26 per cent of its coming soybean harvest of about 45 million tonnes has already been sold.

CORN futures were lower on Thursday, despite recent hefty sales to China.

The USDA report corn export sales of 985,900 tonnes of old crop and 240,900 tonnes of new crop.

There has been a third large private sale of corn to China in as many days. The USDA said the latest sale was for 696,000 tonnes with delivery during the current marketing year. So far this week, China has purchased approximately 3.1 million tonnes of U.S. corn.

U.S. Energy Information Administration reported ethanol production increased 33,000 barrels per day last week, which raised daily production to 971,000 barrels. Ethanol stocks declined 730,000 barrels at 21.34 million.

Better weather in South America was helping corn crops.

WHEAT futures were lower on Thursday, due to large production in Australia and Russia.

After several years of drought, Australia is on pace for a record wheat crop of 33 million tonnes in 2020/21, which is to be followed by 25 million tonnes for 2021/22.

SovEcon upped its projection on 2021/22 wheat production in Russia by 4.1 per cent at 79.3 million tonnes.

Wheat export sales declined 18 per cent from the previous week, according to the USDA. They came to 390,100 tonnes of old crop and 139,000 tonnes of new crop.

The Western Producer

Tags: canola, North American Grain and Oilseed Review