North American Grain/Oilseed Review: Canola turns lower with soybeans

By Phil Franz-Warkentin, MarketsFarm

WINNIPEG, July 10 (MarketsFarm) – The ICE Futures canola market was weaker on Friday, retreating from earlier gains as a downturn in the Chicago Board of Trade soy complex spilled over to weigh on values.

Canola had started the day posting solid gains, hitting fresh three-month highs on the back of speculative short-covering.

However, a bearish reaction to the United States Department of Agriculture monthly supply/demand report weighed on CBOT soybeans and the selling there spilled into the canola market.

Relatively favourable Canadian crop conditions also weighed on values, although enough persistent areas of concern helped temper the declines.

About 23,637 canola contracts traded on Friday, which compares with Thursday when 32,735 contracts changed hands. Spreading accounted for 9,730 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Friday, as the market reacted to the latest supply/demand data from the United States Department of Agriculture.

The USDA pegged U.S. soybean production for 2020/21 at 4.135 billion bushels, which was up from an earlier forecast but below average trade guesses.

Both old and new crop U.S. soybean ending stocks came in at the higher end of pre-report expectations, at 620 million and 425 million bushels respectively.

The USDA also raised its Brazilian production forecast for the year to 126 million tonnes, which was above even the high end of pre-report estimates.

CORN futures were also weaker following the USDA report.

This year’s U.S. corn crop was pegged at 15 billion bushels by the USDA, which was down by nearly a billion bushels from the June estimate and in line with expectations.

Old crop U.S. corn ending stocks were raised to 2.48 billion bushels, while new crop carryout was lowered to 2.648 billion.

The USDA announced private export sales of 1.365 million tonnes of corn to China this morning, confirming rumours that had circulated the market a week ago.

WHEAT futures were mixed, with sharp gains in Chicago soft wheat, a mixed tone in Minneapolis spring wheat, and losses in Kansas City hard red winter wheat.

The USDA lowered its U.S. winter wheat production estimate by 48 million bushels, to 1.218 billion bushels, which was smaller than expected and provide some support.

U.S. spring wheat production was forecast at 550 million bushels, which beat trade estimates.

World wheat production of 769.3 million tonnes was down by 4.1 million from the June estimate.

The USDA reported private export sales of 190,000 tonnes of hard red spring wheat and 130,000 tonnes of hard red winter wheat to China this morning.

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Futures Prices as of July 10, 2020

Canola
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Milling Wheat
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Durum
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New Barley
1970-01-01 00:00
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Prices are in Canadian dollars per metric ton

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