North American Grain/Oilseed Review: Canola ends mixed

The ICE Futures canola market was mixed on Tuesday, with a steady to softer tone in the front months and gains in the more deferred positions.

Monthly supply/demand data from the United States Department of Agriculture did little to move the market, as the latest report was relatively unchanged from February.

Gains in Chicago soyoil and other outside vegetable oil markets did provide some support for canola. Ongoing concerns over tight supplies and the need to ration demand going forward also underpinned the market.

However, scale-up farmer selling and ideas canola was looking overdone to the upside tempered the advances with profit-taking at the highs weighing on values. Adjustments to the old/new crop spread were behind some of the activity.

About 32,256 canola contracts traded on Tuesday, which compares with Monday when 21,008 contracts changed hands. Spreading accounted for 20,104 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Tuesday, following a relatively neutral supply/demand report from the United States Department of Agriculture.

The USDA’s monthly supply/demand report initially elicited a bearish reaction in the bean market, as the government agency kept its balance sheets for the U.S. unchanged on the month.

U.S. soybean ending stocks for the current marketing year were left at 120 million bushels, with adjustments now not expected until after the quarterly stocks data out at the end of the month.

World production numbers only saw small changes on the month. Argentina’s soybean crop was cut by half-a-million tonnes, to 47 million, and Brazilian production upped by a million tonnes, to 134 million.

Continued harvest delays in Brazil due to wet weather there, along with dryness cutting into soybean yield prospects in Argentina, remained supportive for prices.

The U.S. balance sheet for CORN was also left unchanged on the month, with the projected carryout for 2020/21 steady at 1.502 billion bushels.

World ending stocks were raised by 1.1 million tonnes, to 287.67 million, but the production estimates for Brazil and Argentina were left unchanged.

WHEAT futures were higher, seeing a recovery after Monday’s losses.

U.S. wheat ending stocks were left unchanged at 836 million bushels. However, world wheat stocks were lowered by three million tonnes from February, to 301.2 million.

The Western Producer

Tags: canola