By Glen Hallick, MarketsFarm
WINNIPEG, Dec 4 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts reached new contract highs on Friday with support from the Statistic Canada report released yesterday.
The report dropped canola production in 2020 by 3.6 per cent compared to 2019. With strong domestic and foreign demand, the reduced amount of canola is likely to lead to dangerously low ending stocks and to price rationing.
Additional support came from Chicago soyoil and Malaysian palm oil, while European rapeseed was mixed.
The Canadian dollar could be a limiting factor in how high canola prices go. Expectations are for the loonie to hit 80 United States in the coming weeks. The dollar was at 78.20 U.S. cents, compared to Thursday’s close of 77.64.
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There were 48,182 contracts traded on Friday, which compares with Thursday when 45,554 contracts changed hands. Spreading accounted for 39,624 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jan 593.10 up 4.00
Mar 587.80 up 4.10
May 583.20 up 4.70
Jul 576.50 up 5.00
SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Friday, due to profit-taking.
There has been more rain in the northern soybean growing areas of Brazil, while there has been less for central and southern regions of the country.
Soybean crushing in Argentina ground to a halt on Thursday due to a strike. Oilseed workers are demand bonus payments for working during the COVID-19 pandemic.
Indonesia has revised its tariffs on crude palm oil. Instead of the flat $55 per tonne, Indonesia will employ a sliding scale of $55 to $255/tonne depending on the price. The revenues from the tariffs are to go to the country’s bio-diesel program.
CORN futures were lower on Friday, also due to profit-taking.
The United States Department of Agriculture reported a private sale of more than 182,000 tonnes of corn to Mexico. Delivery is to be during the current marketing year.
Crude oil prices continued to be supportive of corn as West Texas Intermediate rose above US$46 per barrel.
WHEAT futures were lower on Friday, due to an abundance of wheat on the global market.
Increases in Australian and Canadian wheat crops weighed on U.S. prices. Earlier this week Australia estimated its crop at more than 31 million tonnes, which is more than double compared to its 2019 harvest. On Thursday, Canada pegged its total wheat crop at nearly 35.2 million tonnes, up 7.7 per cent from the year before.
In international sales, Turkey tendered for 300,000 tonnes of wheat. China is seeking low gluten wheat as tensions with Australia have prohibited imports.
France reported its soft wheat crop rated 96 per cent good to excellent and its barley rated 94 per cent good to excellent.
The European Union reportedly exported 877,000 tonnes of soft wheat in November. That’s up from the 703,000 tonnes in October.
