North American Grain and Oilseed Review: Profit-taking leads to across the board losses

South American rains add to declines

By Glen Hallick, MarketsFarm

WINNIPEG, Jan. 22 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were lower on Friday, as there were sharp declines in the Chicago soy complex.

Soybean contracts at the Chicago Board of Trade careened downward by more than 56 cents per bushel, and soyoil lost in excess of a penny per pound. Soymeal plummeted by over US$16 per hundredweight.

On top of that there were additional declines in other edible oils.

A trader said today’s losses were propelled by profit-taking.

“When everybody is long and the market starts to go down, some people need margin money and one way to get it is to sell what you got,” he remarked.

At mid-afternoon the Canadian dollar was weaker, which provided some measure of support. The loonie was at 78.58 U.S. cents after closing Thursday at 79.20.

There were 33,604 contracts traded on Friday, which compares with Thursday when 42,195 contracts changed hands. Spreading accounted for 18,474 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Mar 649.60 dn 7.40
May 635.80 dn 9.20
Jul 623.60 dn 8.90
Nov 545.40 dn 7.60

SOYBEAN futures at the Chicago Board of Trade (CBOT) were significantly weaker on Friday, due to a major round of profit-taking.

More rain in South American has been helping soybean crops in Brazil and especially Argentina. Dry conditions are essentially no longer a major concern, according to reports.

However, dryness across the United States Midwest and most of the Canadian Prairies could play a role when it comes to this year’s planting of soybeans and canola.

The Buenos Aires Grain Exchange (BAGE) reported that nearly 90 per cent of Argentina’s soybean crop has been planted. Also that crop conditions improved from 18 per cent good-to-excellent last week to 21 per cent this week.

Agroconsult reduced its estimate of the Brazil soybean crop from 133.2 million tonnes to 132.4 million. The firm projected 2020/21 soybean exports out of Brazil at 83 million tonnes.

IHS Markit forecast U.S. planted soybean acres for calendar year 2021 to be 90.08 million, for an increase of 8.4 per cent from 2020.

The U.S. Department of Agriculture reported export sales of old crop soybeans were almost 1.82 million tonnes for the week ended January 14. New crop soybean sales were 831,000 tonnes. Soymeal export sales hit a marketing year high at 468,500 tonnes, while soyoil reached 52,300 tonnes.

CORN futures were weaker on Friday, also due to profit-taking.

The U.S. Energy Information Administration (EIA) reported that ethanol production increased slightly by 4,000 barrels per day (BPD) at 945,000 BPD. Ethanol stocks slipped 64,000 barrels at 2.36 million barrels.

The USDA reported export sales of corn for the week were nearly 1.44 million tonnes of old crop and 46,400 tonnes of new crop.

IHS Markit pegged U.S. corn planted acres in 2021 at 94.24 million for an increase of 3.7 per cent over those last year.

The BAGE said more than 93 per cent of Argentina’s corn crop has been planted. The crop improved to 28 per cent good-to-excellent from last week’s 19 per cent.

Agroconsult estimated Brazil’s safrinha corn crop at 83.9 million tonnes, with the country’s total corn production to reach 109 million tonnes. Also, the firm forecast Brazil corn exports to be 39 million tonnes.

WHEAT futures were lower on Friday, caught up in the spillover from soybeans and corn.

The USDA said wheat export sales jumped 49 per cent from the previous week at 329,600 tonnes.

IHS Markit projected total U.S. planted wheat acres in 2021 to be 31.99 million tonnes, for a three per cent increase over those in 2020.

SovEcon predicted the 2021 Russian wheat crop to be 77.7 million tonnes, up from its previous estimate of 76.8 million.

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Futures Prices as of January 22, 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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