North American Grain and Oilseed Review: Profit-taking erodes earlier gains

Intercontinental Exchange (ICE) canola futures finished mixed on Wednesday with declines in the more heavily-traded old crop months.

Earlier in the session the nearby March contract hit a new contract high of C$1,020.50 per tonne. A trader noted the open interest in the January contract was already below 8,000.

He also suggested that with the Canadian markets closed on Dec. 27 and the United States markets open that day, opportunities for profit-taking in canola have arisen.

Support for the Canadian oilseed came from strong upticks in the Chicago soy complex, Malaysian palm oil and European rapeseed, which saw new contract highs as well. Increases in global crude oil prices also lent support to edible oil values.

Tight supplies and the new to ration demand continued to underpin canola. However, there are ideas that it’s now overvalued.

As the U.S. dollar stepped back a little the Canadian dollar was gained strength. At mid-afternoon the loonie was at 77.84 U.S. cents, compared to Tuesday’s close of 78.36.

There were 21,190 contracts traded on Wednesday, which compares with Tuesday when 16,518 contracts changed hands. Spreading accounted for 11,748 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 1,018.80 dn 3.80
Mar 1,010.70 dn 2.20
May 977.70 up 1.10
Jul 928.30 up 6.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Wednesday, as dryness in Argentina and southern Brazil are a growing concern to the markets.

Ahead of the weekly export sales report from the United States Department of Agriculture (USDA), trade expectations are 700,000 to 1.7 million tonnes of soybeans. Soymeal are projected to be 50,000 to 250,000 tonnes, with soyoil at 50,000 to 75,000 tonnes.

The USDA attaché in Malaysia estimated that country’s biodiesel production for 2021 at 1.05 billion litres. That’s down 16 per cent from the previous year.

CORN futures were higher on Wednesday, benefitting from spillover from soybeans and wheat

Market projections place U.S. corn export sales are 725,000 to 1.4 million tonnes.

The U.S. Energy Information Administration (EIA) reported ethanol production for the week ended Dec. 17 averaged 1.05 million barrels per day (BPD). That’s down 36,000 BPD from the previous week. Ethanol stocks lost 178,000 barrels at 20.7 million.

The U.S. Grains Council said in its harvest quality report that for 2021/22 corn test weights were 58.3 pounds per bushel. While that slipped 0.4 bu/lb. from a year ago, it’s above the five-year average.

Ukraine stated its 2021/22 corn crop is projected to be a record 39.82 million tonnes.

WHEAT futures were stronger on Wednesday, as drought conditions still prevail across the U.S. Southern Plains.

U.S. Trade Representative Katherine Tai said to Congress that Russia’s restrictive import policies and practices are in violation of World Trade Organization (WTO) rules. In turn, Russia disagreed with Tai’s assessment.

U.S. wheat export sales are predicted to be 200,000 to 550,000 tonnes.

SovEcon bumped up its call on Russia’s 2022/23 wheat crop by nearly three-quarters of a point at 81.3 million tonnes.

Ukraine said its 2021/22 wheat crop was 32.7 million tonnes, up 29.4 per cent from the previous year.

Despite dry conditions, Argentina’s wheat crop is now expected to be up 4.8 per cent at 22 million tonnes.

In international sales, Turkey tendered for 320,000 tonnes of wheat, Iran placed one for 180,000 tonnes of milling wheat, and Algeria is considering bids for 50,000 tonnes of durum.

The Western Producer

Tags: export, soybean futures, corn futures, soyoil, canola futures, wheat futures