By Glen Hallick, MarketsFarm
WINNIPEG, Jan. 20 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were lower on Wednesday.
Weakness in Chicago soybeans and soymeal drove down canola prices, with additional pressure from lower European rapeseed and Malaysian palm oil.
Sharp gains in Chicago soyoil helped to bring canola prices off of their lows.
A trader emphasized that canola is too cheap and needs to become more expensive, in light of tight ending stocks.
At mid-afternoon the Canadian dollar was stronger at 79.06 U.S. cents after closing Tuesday at 78.52.
There were 52,709 contracts traded on Wednesday, which compares with Tuesday when 31,977 contracts changed hands. Spreading accounted for 17,520 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Canola Mar 648.40 dn 15.80
May 634.60 dn 12.00
Jul 619.70 dn 10.90
Nov 536.50 dn 5.10
SOYBEAN futures at the Chicago Board of Trade (CBOT) were weaker on Wednesday, on the prospect of a large South American soybean crop.
ANEC estimated soybean exports out of Brazil so far in January were nearly 1.03 million tonnes. Last week the consultancy pegged the month’s exports at approximately 1.05 million tonnes.
There’s more labour action in South America, this time with truck drivers in Argentina protesting against surging inflation and calling for increased wages.
United States exports of soybeans to China in 2020 were at 25.89 million tonnes, up almost 53 per cent compared to 2019. However, expectations are for China to fall short of its agricultural purchase obligations set out in the Phase One trade deal.
In addition, China’s soybean imports from Brazil in 2020 were 64.28 million tonnes, up 11.5 per cent compared to those in 2019. Total soybean imports in 2020 hit a record 100.3 million tonnes.
U.S. President Joe Biden indicated his administration could maintain the tough trade stance the Trump administration took with China.
CORN futures were lower on Wednesday, caught up in some of the spillover from soybeans.
In one of Donald Trump’s final acts as U.S. President, he granted biofuel blending waivers on Tuesday to three unnamed oil refiners. National Corn Growers Association President John Linder denounced the waivers, stating they undermine corn farmers.
There have been forecasts that significantly increased corn production in Brazil, with some reaching as high as 113.5 million tonnes, compared to most estimates around 10 million tonnes below that.
ANEC placed Brazil corn exports for January at 2.40 million tonnes, up from its previous call of 2.12 million.
WHEAT futures were lower on Wednesday on pressure from soybeans.
Deputy Prime Minister of Russia Victoria Abramchenko said the country’s total grain production in 2021 is to be about 131 million tonnes. That would be down two million tonnes from Russia’s 2020 crop. Abramchenko didn’t provide a crop by crop breakdown.
In international purchases, the United Nations bought 120,000 tonnes of wheat to be donated to Ethiopia, and Jordan closed its tender for 120,000 tonnes with the results to be announced later today.