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North American Grain and Oilseed Review: Canola retreats to start week

Soybeans, wheat take double-digit losses

By Glen Hallick, MarketsFarm

WINNIPEG, Nov. 30 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished lower on Monday, due to profit-taking and weaker edible oils.

There’s uncertainty in the markets toward the upcoming principal field crops report from Statistics Canada. The general consensus is for canola production to be lower than the 19.3 million tonnes initially forecast, with some projections below 19 million tonnes. However, the markets will have to wait until Thursday when the report will be released, which led to profit-taking, according to a trader.

Large declines in the Chicago soy complex contributed to the retreat in canola, as did lower European rapeseed. Gains in Malaysian palm oil provided a small measure of support.

The Canadian dollar was relatively steady at 77.08 U.S. cents, compared to Friday’s close of 77.01.

There were 35,542 contracts traded on Monday, which compares with Friday when 30,744 contracts changed hands. Spreading accounted for 27,490 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 578.10 dn 4.90
Mar 573.70 dn 5.50
May 570.10 dn 5.80
Jul 564.30 dn 5.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Monday, due to improved conditions in South America.

Rainfall in Brazil and Argentina provided a much needed boost to soybean crops. More rain is in the forecast in the coming days.
A shipment of 1.1 million tonnes of soybeans left the United States for Brazil on Nov. 27. Not only did Brazil oversell its 2019/20 soybean crop to China, but feed prices and domestic food prices are rising as well.

The United States Department of Agriculture (USDA) reported soybean export inspections of nearly 2.04 million tonnes for the week ended Nov. 26, with China and Thailand as the top destinations. At this point in the 2020/21 marketing year the U.S. has shipped about 26.68 million tonnes, which is 67 per cent more than this time in 2019/20.

There’s market speculation that China could be cutting back on its U.S. purchases, as prices are getting too high.

The Australian Bureau of Agricultural and Resources Economics Sciences (ABARES) reported canola production in the country for 20/21 is to jump 59 per cent compared to 19/20. The forecast is now for 3.71 million tonnes, which would make for Australia’s fifth largest canola crop.

CORN futures were lower on Monday, caught up in the spillover from soybeans.

The USDA reported two private sales of corn with both going to unknown destinations. One sale was for 104,000 tonnes and the other for 240,000 tonnes. Delivery for both is to be during the current marketing year.

Corn export inspections came to 890,033 tonnes with China and Mexico as the top destinations. So far 10.14 million tonnes of corn have been exported, about 67.6 per cent more than this time last year.

SAFRAS dropped its forecast for Brazil’s first corn crop to 19.0 million tonnes. However SAFRAS kept its annual projection at 112.9 million tonnes.

WHEAT futures dropped on Monday, after rainfall over the U.S. Southern Plains, which aided struggling winter wheat crops.

The USDA is scheduled to release its weekly crop progress report at 3 pm Central today.

Wheat export inspections totaled 502,788 tonnes with the Philippines and Mexico as the top destinations. About 12.9 million tonnes have been exported, which is up 1.7 per cent compared to the previous year.

ABARES boosted its estimate of Australia’s wheat crop to 31.16 million tonnes, which would be more than double the output in 19/20. Barley production was raised 33 per cent at 11.96 million tonnes.

There is speculation in the markets that Russia could increase its wheat export quota from 15 million tonnes to 17.5 million during the second half of the 20/21 marketing year.

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Futures Prices as of November 30, 2020

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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