The charts were solidly red, but there was little love in the air for North American grain and oilseeds during Valentine’s Day week.
Canola, wheat and corn futures all hit contract lows and soybeans were at their softest levels in eight months.
The March ICE Futures canola contract settled at C$567 per tonne on Feb. 15, marking the lowest close for a front-month canola contract in just over three years.
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The market has been in a steady downtrend since the end of August, with no current end in sight, barring an outside catalyst.
Favourable crush margins continue to keep local processors in the market for canola, with a domestic disappearance through 28 weeks of the 2023-24 crop year of 5.8 million tonnes. That is 5.5 per cent ahead of the year-ago pace.
But export movement is dragging, with the 3.2 million tonnes exported to date about 1.5 million tonnes behind what moved in the same time the previous year, according to Canadian Grain Commission data.
Canola futures will likely continue to test new lows until fresh export interest is uncovered.
Large, unpriced supplies still being held by farmers are adding to the bearish sentiment. Much like exports, producer deliveries into the commercial pipeline are well behind what moved the previous year, reported at 8.9 million tonnes compared to 10.7 million tonnes.
Even if prices drop low enough to create more demand, there’s plenty of selling waiting to limit any bounce.
International
In the U.S., attention was split during the week between South American production prospects and early ideas on the 2024-25 U.S. crops.
Anecdotal reports of disappointing Brazilian yields caused some forecasters to lower their calls on the country’s soybean crop. Still, newly harvested supplies will soon displace U.S. beans in the international market, while increased production out of Argentina should lead to larger overall South American soybean supplies.
Closer to home, the U.S. Department of Agriculture held its annual Agriculture Outlook Forum, releasing its first supply/demand forecasts for the 2024-25 crop year.
The early call was for soybean seeding to increase by 3.9 million acres on the year, hitting 87.5 million acres, while corn area was forecast to drop by 3.6 million acres to 91 million. However, yields of both crops were forecast to hit record levels of 52 bushels per acre for soybeans and 181 bu./acre for corn.
Projected U.S. corn ending stocks were forecast to rise to 2.5 billion bushels, from an expected 2.2 billion at the end of the current marketing year. The soybean carryout was estimated to increase to 435 million bushels from 315 million.
March soybeans touched an eight-month low of US$11.6025/bu. on Feb. 15, with the next downside target around the $11.50 mark. The March corn contract fell as low as $4.1650/bu. during the week, a price not seen in the nearby futures since December 2020.
