North American Grain and Oilseed Review: Canola gets good bounce ahead of weekend

Source: Canadian Cattlemen

By Glen Hallick, MarketsFarm

WINNIPEG, March 19 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were higher on Friday, recovering a large portion of the steep losses incurred the last few days.

Support came from good gains in the Chicago soy complex and European rapeseed. There were small increases in Malaysian palm oil.

Agriculture and Agri-Food Canada (AAFC) issued its monthly supply and demand estimates on March 18, with no major changes for canola. Ending stocks for the current and 2021/22 marketing years were kept at 700,000 tonnes, which is a stark contrast to the 2019/20 carryover of 3.13 million.

The Canadian Grain Commission said producer deliveries of canola for the week ending March 14 were about 429,000 tonnes. Exports were more than 304,000 tonnes and domestic usage was slightly over 199,000 tonnes.

At mid-afternoon, the Canadian dollar was lower with the loonie at 80.03 U.S. cents compared to Thursday’s close of 80.27.

There were 28,949 contracts traded on Friday, which compares with Thursday when 29,544 contracts changed hands. Spreading accounted for 12,274 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 776.20 up 22.10
Jul 727.10 up 16.70
Nov 619.60 up 8.30
Jan 621.60 up 8.90

SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Friday, as old crop supplies in the United States become tighter.

The U.S. Department of Agriculture (USDA) reported 2020/21 soybean export sales of 56.57 million tonnes so far, hitting 99 per cent of the department’s forecast with five month left in the crop year.

Despite a good amount of acrimony, talks between the U.S. and China continued for a second day in Alaska. As both sides attempt to smooth over high tensions, they resorted to a number verbal jabs and barbs.

The USDA attaché in China has pegged that country’s soybean imports for 2020/21 at 99 million tonnes, with 100 million tonnes expected the following year. In comparison, China’s domestic production of soybeans was at 18.6 million tonnes.

The green energy push by the Biden administration was said to be a boost to edible oil prices. However, the growing demand for oilseeds for biofuels has pushed up domestic food prices.

CORN futures were higher on Friday, on the strength of purchases this week by China.

There was a fourth-consecutive large sale of U.S. corn to China. The USDA reported a purchase of 800,000 tonnes with delivery during the current marketing year. On the week, China has acquired about 3.9 million tonnes of corn from the U.S.

Reports estimated that 12 to 15 per cent of China’s hog herd contracted African swine fever since Jan. 1. There are thoughts in the trade that China’s demand for feed grains could tumble if the incurable disease for hogs isn’t soon brought under control.

Timely rains in Argentina have saved much of the country’s coming corn harvest, according to the Buenos Aires Grain Exchange.

WHEAT futures were mixed on Friday, with losses in Chicago and Kansas City and a gain for Minneapolis.

Gains in the U.S. dollar weighed on wheat values, as the greenback was at 91.935 points on the U.S. Dollar Index.

FranceAgriMer reported soft wheat conditions this week in France at 87 per cent good to excellent. Although a slip of one point from the previous week, it’s well above the 63 per cent this time a year ago.

Strategie Grains trimmed its projection for 2020/21 soft wheat exports out of the European Union and the United Kingdom by 900,000 tonnes to 25.2 million, due to reduced demand out of China. The consultancy bumped its call on ending stocks by one million tonnes to 11.3 million. Production in 2021/22 is expected to be 129.6 million tonnes, up 10.3 million from the previous year.