North American Grain and Oilseed Review: Canola recovers somewhat on higher veg oils

Source: Canadian Cattlemen

By Glen Hallick, MarketsFarm

WINNIPEG, March 29 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were higher on Monday, partially recovering from sharp losses incurred late last week.

There were gains in Chicago soyoil, but there were declines in soybeans and soymeal. Additional support for canola came from increases in European rapeseed and Malaysian palm oil.

Tight supplies of canola in Canada also continued to underpin values.

A trader expects gains in canola not to last much longer as the spec funds are looking to liquidate their May contracts. Also, he said the increases in soyoil could be finished for now.

At mid-afternoon, the Canadian dollar was slightly lower with the loonie at 79.38 U.S. cents compared to Friday’s close of 79.49.

There were 21,682 contracts traded on Monday, which compares with Friday when 26,135 contracts changed hands. Spreading accounted for 9,222 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola May 756.20 up 4.70
Jul 716.20 up 9.70
Nov 605.50 up 1.70
Jan 609.10 up 1.90

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Monday, due to progress in the Brazil soybean harvest, which was approximately two-thirds complete.

The United States Department of Agriculture (USDA) is scheduled to release its planting projections and quarterly grains stocks reports on March 31. Trade expectations peg soybean acres this year at 90 million, for an increase of 7.4 per cent over last year.

The USDA issued its weekly export inspections report, showing soybean shipments were down about 14 per cent at approximately 425,360 tonnes. The year-to-date stands at more than 54.07 million and are up 71.6 per cent from a year ago.

The market has forecast U.S. soybean stocks as of March 1 to be 1.54 billion bushels. That would make for a drop of 31.8 per cent from stocks as of March 1, 2020.

CORN futures were lower on Monday, due to spillover from soybeans.

Reports out of Brazil said the planting of the safrinha (second) corn crop is about 70 per cent complete country-wide.

The trade expects U.S. planted corn acres to bump up 1.1 per cent this year at 92 million. Also, corn stocks are estimated to be 7.76 billion bushels, almost 0.4 per cent less than a year ago.

The USDA said corn export inspections were just shy of 1.7 million tonnes and down nearly 16 per cent from the previous week. The year-to-date inspections are 85.8 per cent ahead of a year ago at 33.74 million tonnes.

WHEAT futures were mixed on Monday, with gains in Chicago and Kansas City and a loss in Minneapolis.

Wheat exports fell 53.8 per cent at approximately 302,200 tonnes. The year-to-date reached 20.30 million tonnes, which is 0.89 per cent less than a year ago.

Expectations on Wednesday call for a 3.8 per cent increase in total U.S. wheat acres, but with declines in spring wheat acres.

Wheat stocks as of March 1 are expected to be 1.27 billion bushels, for a decline of 8.2 per cent from a year ago.

Improving weather conditions in the U.S., as well as in Europe, Russia and Australia put pressure on wheat.