North American Grain/Oilseed Review: Canola sharply stronger, but off highs

The ICE Futures canola market was sharply higher on Thursday, as the Russian invasion of Ukraine sparked a rally in crude oil and world vegetable oil markets.

Weakness in the Canadian dollar, which fell to its softest level since December relative to its United States counterpart, added to the strength in canola.

However, losses in Chicago Board of Trade soybeans did put some spillover pressure on canola. Profit-taking also came forward at the highs to temper the advances in the Canadian oilseed.

About 41,376 canola contracts traded on Thursday, which compares with Wednesday when 23,635 contracts changed hands. Spreading accounted for 11,580 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade initially climbed higher in overnight activity, as the Russian invasion of Ukraine sparked broad buying in the agricultural commodities. However, the market ran into resistance and turned lower as the day session got underway.

The United States Department of Agriculture released baseline estimates for 2022/23 U.S. production at their annual Agriculture Outlook Forum on Thursday. The government agency is forecasting a record 4.49 billion bushel crop. Planted area is forecast to rise to 88 million acres, with average yields of 51.5 bushels per acre.

However, the USDA sees soybean ending stocks down slightly on the year, to 305 million bushels by the end of 2022/23, due to an expected increase in exports and domestic usage.
South American production concerns remained in the background of the soy market.

CORN was mixed, with gains in the front months and losses in the new crop contracts.

The USDA is calling for a 1.4 million acre reduction in U.S. corn area in 2022, at 92 million acres. However, with a four bushel per acre bump in yields, to 181 bushels per acre, total production is forecast at a record 15.24 billion bushels. Corn ending stocks were also forecast to rise on the year, to 1.965 billion bushels.

WHEAT was up sharply, as the grain is most directly linked to the Russia/Ukraine situation.

Sanctions against Russia could limit grain movement out of the region, opening the door for more U.S. business.

The USDA forecast U.S. wheat production in 2022/23 at 1.94 billion bushels, with planted area at 48 million acres.

The Western Producer

Tags: Ukraine, Russia, corn, Vegetable Oil, soybean, wheat, futures, markets, canola market