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North American Grain/Oilseed Review: Weather forecast, Chicago losses bring down prices

By Glen Hallick, MarketsFarm

WINNIPEG, June 19 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were weaker on Wednesday, due to the weather forecast and spillover from the Chicago Board of Trade.

Showers and thundershowers have been forecast for most of the Prairies through to the weekend. Daytime highs are to be in the mid-teens to low 20’s Celsius.

“A little rain in the forecast put some pressure on the market. The potential for rain across the Prairies is good, but it doesn’t look like heavy rain,” said a Winnipeg-based analyst.

There were significant losses in Chicago today, as soybeans, corn and wheat lost ground.

There were 25,312 contracts traded on Wednesday, which compares with Tuesday when 39,712 contracts changed hands. Spreading accounted for 16,212 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jul 455.50 dn 5.00
Nov 469.30 dn 6.70
Jan 475.90 dn 7.00
Mar 481.60 dn 7.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Wednesday, as profit-taking, technical selling and expectations of mediocre export sales drove down prices.

The United States Department of Agriculture (USDA) is scheduled to release its export sales report on Thursday. The markets believe 198,000 to 800,000 tonnes of soybeans will be sold. Along with 100,000 to 400,000 tonnes of soymeal and 5,000 to 25,000 tonnes of soyoil.

Chinese President Xi Jinping and U.S. President Donald Trump will meet at the G20 Summit in Japan next week. The two are expected to discuss trade and that could signal the resumption of U.S./China trade talks.

The Chicago Mercantile Exchange lifted its force majeure at soybean and corn shipping stations, as water levels have dropped on the Mississippi and Illinois Rivers.

CORN futures were lower on Wednesday, due to profit-taking, despite expectations of reduced production this year.

Market pegged its estimates of corn exports between 300,000 to 900,000 tonnes.

Farm Futures estimated U.S. corn production to be about 332.76 million tonnes this year. That’s a decline of 12.70 million tonnes from the USDA’s estimate.

Ethanol production in the U.S consumed about 27,460 tonnes per day between June 7 and 14. That’s down slightly from the previous week.

China’s corn production could reach 252 million tonnes, as cool, wet weather has set in. However, outbreaks of fall armyworms could hurt production in some regions.

With hot and dry weather, Ukraine’s corn crop has suffered. The USDA lowered its estimate of Ukraine’s 2019/20 corn production to 33.0 million tonnes, compared to the previous crop year’s 35.81 million tonnes.

WHEAT futures were weaker on Wednesday, also due to profit-taking.

The markets projected export sales of 198,000 to 500,000 tonnes of wheat.

The U.S. lost out on a tender issued by Egypt for about 291,000 tonnes of wheat. Egypt opted to buy less expensive wheat from Russia and Romania. U.S. wheat has been less competitive globally.

Commodity Future Prices

Canola
Price Change

Prices are in Canadian dollars per metric ton

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