North American Grain/Oilseed Review: Canola weakens with outside markets

The ICE Futures canola market was weaker on Thursday, but well off its lows for the session as chart support was uncovered to the downside.

Losses in European rapeseed and Chicago soyoil futures accounted for some spillover selling pressure in the Canadian market, with reports of increasing palm oil exports out of Indonesia bearish for the world vegetable oil markets in general.

A lack of significant weather concerns across Western Canada for the time being also weighed on prices, despite seeding delays in Manitoba and ongoing dryness in Alberta.

The Canadian dollar was down sharply on the day, providing some underlying support.

About 22,406 canola contracts traded on Thursday, which compares with Wednesday when 17,151 contracts changed hands. Spreading accounted for 14,096 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade hit fresh 10-year highs on Thursday, seeing some follow-through speculative buying after Wednesday’s rally.

The United States Department of Agriculture releases its monthly supply/demand report tomorrow and positioning ahead of the data accounted for some of the activity in all the grains and oilseeds.

Weekly U.S. soybean export sales topped one million tonnes of old and new crop business combined which was at the higher end of trade expectations. The USDA announced additional private sales of 143,000 tonnes to unknown destinations this morning.

Reports that Brazil was considering upping its biodiesel blending requirements from 10 to 15 per cent were also supportive, as the country’s crushing capacity would need to increase, or Brazil would need to import soyoil to meet that demand.

CORN was also higher. Forecasts calling for hot and dry midwestern weather were supportive, as the corn crop is still in its early stages of development.

Weekly U.S. corn export sales of 280,000 tonnes to be delivered during the current marketing year were up from the previous week, but new crop sales of only 73,500 tonnes were at the low end of expectations.

Talks between Russia and Turkey to open a shipping corridor through the Black Sea have yet to yield any significant results – keeping the uncertainty over Ukrainian grain exports in the background of the market.

WHEAT was weaker, but well off its session lows. Weekly old crop wheat export sales for the final week of the 2021/22 crop year included net cancellations of 27,000 tonnes. A total of 18.67 million tonnes of U.S. wheat were shipped during the marketing year, which was 25 per cent below what moved the previous year.

New crop U.S. wheat export sales for the week came in at 451,000 tonnes. The U.S. wheat marketing year starts June 1.

Tags: soyoil, palm oil, wheat futures, Market, exports, canola, prices, soybean futures, corn futures, Vegetable Oil