North American Grain/Oilseed Review: Canola weakens with spec liquidation

The ICE Futures canola market was weaker on Tuesday, with speculative profit-taking a feature.

Positioning ahead of updated renewable fuel blending requirements from the United States Environmental Protection Agency (EPA) accounted for some of the activity, according to a trader. Speculators were reportedly liquidating long positions and booking profits in case the rumoured EPA announcement generated any shocks to the vegetable oil markets.

The Canadian dollar was sharply stronger on the day, putting additional pressure on canola.

However, the ongoing concerns over tight supplies remained supportive. Domestic crushers also continue to show good demand.

About 16,675 canola contracts traded on Tuesday, which compares with Monday when 22,393 contracts changed hands. Spreading accounted for 12,474 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, with positioning ahead of the United States Department of Agriculture’s supply/demand estimates on Dec. 9 a feature.

Expectations for large South American production were overhanging the market, with Brazil’s soybean crop 90 per cent seeded, according to reports out of the country.

The USDA did announce private export sales of 123,000 tonnes of soybeans to unknown destinations this morning, providing some support.

CORN futures traded to both sides of unchanged throughout the session, but held onto gains by the close in sympathy with wheat.

Traders were awaiting anticipated blending mandates from the U.S. Environmental Protection Agency, rumoured to be out sometime Tuesday. The EPA’s blending requirements were initially set to be announced at the end of November, but the deadline was extended indefinitely. General expectations are that the targets for 2021 and 2022 will come in well below initial targets set prior to the pandemic.

Corn seeding in Brazil is nearing completion, with 94 per cent of intended acres in the ground in the key centre-south growing region.

WHEAT was higher across the board, with positioning ahead of Thursday’s report a feature.

Quality and supply concerns from a number of major wheat exporters kept the market well supported.

A number of country’s were tendering for wheat, with the U.S. making up a large portion of Japan’s latest purchases.

The Western Producer

Tags: soybean futures, corn futures, canola market, wheat futures