North American Grain/Oilseed Review: Canola recovers from early losses to post gains

The ICE Futures canola market was stronger at Monday’s close, recovering from early losses as strength in Chicago Board of Trade soyoil provided spillover support.

Speculative profit-taking had weighed on the market for most of the session, but the underlying fundamentals remain supportive and the market managed to move higher late in the day. The tight canola supply situation, confirmed by Statistics Canada in their updated production estimates on Dec. 3, contributed to the eventual gains.

However, ideas that canola is looking overpriced at current price levels tempered the upside to some extent, with resistance holding above the market. Strength in the Canadian dollar and losses in CBOT soymeal also put some pressure on values.

About 22,393 canola contracts traded on Monday, which compares with Friday when 17,832 contracts changed hands. Spreading accounted for 8,834 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Monday, with uncertainty over the Omicron COVID-19 variant keeping some caution in the grains and oilseeds.

Gains in energy and vegetable oil markets, including soyoil, provided some support, but soymeal was weaker on the day and soybeans struggled to find any strength of its own.

United States soybean export commitments are running well behind the year-ago pace, which accounted for some of the selling pressure. However, the U.S. Department of Agriculture did announce private export sales of 130,000 tonnes of soybeans to China this morning.

CORN was mixed, with the bias lower in the most active nearby contracts.

Weekly U.S. corn inspections of about 760,000 tonnes were down slightly from the previous week, with total exports to date of 9.4 million tonnes running about two million tonnes behind the year ago pace.

Reports out of China place corn production in 2021 there at 272.6 million tonnes, which would be up by nearly five per cent on the year. That’s slightly below the USDA’s current projection of 273 million.

The USDA releases updated supply/demand estimates on Thursday, with pre-report positioning likely to be a feature the next few days.

WHEAT finished mixed, with gains in Minneapolis and Chicago, but a steady to softer tone in Kansas City hard red winter wheat.

U.S. wheat carryout and world production numbers will be followed closely in Thursday’s USDA report, with a number of major world exporters dealing with tighter wheat supplies this year.

The Western Producer

Tags: soybean futures, Production, wheat, soyoil, canola market, vegetable oil markets, soymeal, corn