North American Grain and Oilseed Review: Canola gets shot in the arm from soyoil

CBOT: Soybeans, corn up, wheat lower

By Glen Hallick, MarketsFarm

WINNIPEG, Jan. 21 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were stronger on Thursday with spillover from sharp gains in Chicago soyoil.

There was additional support from gains in European rapeseed and Malaysian palm oil.

The largest increases in canola came in the new crop months.

The likelihood of tight ending stocks helped to boost values, while the prospect of a large South American soybean crop tempered further gains.

At mid-afternoon the Canadian dollar was slightly higher as it weighed on values. The loonie was at 79.16 U.S. cents after closing Wednesday at 79.01.

There were 42,195 contracts traded on Thursday, which compares with Wednesday when 52,709 contracts changed hands. Spreading accounted for 18,748 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 657.00 up 8.60
May 645.00 up 10.40
Jul 632.50 up 12.80
Nov 553.00 up 16.50

SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly higher on Thursday, due to strong demand.

The United States Department of Agriculture (USDA) reported several private sales including two for soybeans. One sale was for 136,000 tonnes to China and the other was for 163,290 tonnes to Mexico. Delivery for both is to be during the current marketing year.

Due to the Martin Luther King Jr. holiday this week, the USDA has delayed its weekly export sales report to Friday.

With tight ending stocks expected, price rationing is likely to become a strong supportive factor, according to a report.

With the soybean harvest in Brazil in its early stages, three private consultancies issued revised projections. StoneX reduced its forecast from 133.9 million tonnes to 132.6 million. IHS Markit raised its estimate from 132.5 million tonnes to 133 million. Datagro increased its call from 135 million tonnes to 135.6 million. The most recent official estimate from Brazil’s CONAB is 133.7 million tonnes.

There was an outbreak of African swine fever in China’s Guangdong province. About 215 pigs were killed on a farm of more than 1,000 head. It was China’s first outbreak since June 2020.

CORN futures were higher on Thursday, also due to good demand.

The USDA reported a flash sale of 336,500 tonnes of corn to unknown destinations with delivery during the current marketing year.

The U.S. Energy Information Administration (EIA) postponed its weekly ethanol report to Friday.

Farmers in Argentina significantly increased their corn sales for the week ended Jan. 13. Sales skyrocketed 220 per cent at 1.07 million tonnes as farmers have been selling out of concerns that the government could limit future exports.

WHEAT futures were lower on Thursday after trading higher earlier.

The USDA reported a private sale of 138,000 tonnes of hard red winter wheat to Nigeria, with delivery during the 2021/22 marketing year.

AgResource estimated that 41 per cent of Argentina’s 2020/21 wheat crop has been sold, which is slightly behind the five-year average. The firm also said that dry conditions in Brazil will very likely reduce its wheat production, making the country more dependent on imports from Argentina.

In international sales, there were 390,000 tonnes of milling wheat to Algeria, and 72,653 tonnes of food quality wheat to Japan. Also, there were several tenders issued, including Turkey for 400,000 tonnes of milling wheat, and Tunisia for 184,000 tonnes of wheat plus 75,000 tonnes of feed barely. Saudi Arabia issued a tender for 480,000 tonnes of feed barley.

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Futures Prices as of January 21, 2021

Canola
Price Change
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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