The ICE Futures canola market tested major support levels in early October, nearing the psychological $700 per tonne level in the nearby November contract on several occasions but never dipping below that point.
An eventual rally in the Chicago soy complex provided the catalyst for a more definitive correction off that low.
The U.S. Department of Agriculture released its monthly supply/demand estimates on Oct. 12, with the numbers eliciting a bullish response in both soybeans and corn.
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USDA pegged average soybean yields in the country this year at 49.6 bushels per acre, which was down from 50.1 forecast in September and at the lower end of trade expectations. Total U.S. soybean production, at 4.104 billion bushels, was also down from the September estimate, and the smallest crop in four years.
The projected carryout was left unchanged at 220 million bushels, which would be the tightest ending stocks in eight years if realized. Expectations ahead of the report had been for an upward revision to the carryout. That it was left unchanged at such a low level is seen as supportive for prices.
The USDA data included updated estimates on world oilseed markets, with Canada’s canola production pegged at 17.8 million tonnes. That would be up by 400,000 from Statistics Canada’s current forecast, but well below the 18.7 million tonnes grown in 2022. USDA lowered its forecast for Canadian canola exports to 7.5 million tonnes, from an earlier estimate of 7.9 million tonnes.
World rapeseed production for 2023-24 was estimated at 85 million tonnes by USDA, only a slight revision from the September forecast and down by 3.7 million tonnes from the previous year. World rapeseed ending stocks are forecast at 6.2 million tonnes, with Canada accounting for 1.2 million tonnes of that total.
Agriculture and Agri-Food Canada currently expects an even tighter Canadian canola carryout of one million tonnes.
Corn and wheat futures in the U.S. were also underpinned by the USDA estimates. The government agency lowered its average corn yield estimate to 173 bu./ac., from 173.8 in September.
Total U.S. corn production, at 15.064 billion bushels, was down by 70 million from the last estimate. The expected carryout was lowered by 110 million bushels, to 2.111 billion. World corn carryout tightened by 1.6 million tonnes, to 312.4 million.
U.S. wheat production was pegged at 1.812 billion bushels, which was up from the September report but in line with the latest small grains estimate. U.S. wheat ending stocks were raised to 670 million bushels, up by 55 million from the last estimate.
While wheat futures managed to move higher during the week, the larger-than-expected U.S. carryout forecast could be expected to drag on values.
World wheat production was cut by nearly four million tonnes, to 783.4 million, with the carryout down half a million tonnes at 258.1 million.
