By Glen Hallick, MarketsFarm
WINNIPEG, May 10 (MarketsFarm) – A number of factors conspired to send Intercontinental Exchange (ICE) canola futures lower on Monday, with the July contract hitting its down limit.
Declines in Chicago soyoil, Malaysian palm oil and European rapeseed worked together with profit-taking to generate sharp losses to start the week.
At mid-afternoon, a stronger Canadian dollar added to the pressure on canola. The loonie was at 82.66 U.S. cents compared to Friday’s close of 82.26.
There have been some rumblings that less canola could be planted in 2021 than recently projected. Should dry conditions persist across the Prairies, then farmers could switch to growing something more tolerable to the dryness.
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That said, a large portion of Alberta received a half inch to 1.5 inches of rain over the weekend, with southwest Saskatchewan also receiving precipitation.
Despite the losses today, spectre of tight canola supplies will remain an underpinning factor for the time being.
There were 25,515 contracts traded on Monday, which compares with Friday when 23,740 contracts changed hands. Spreading accounted for 9,532 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jul 975.90 dn 30.00
Nov 733.90 dn 18.20
Jan 726.50 dn 17.00
Mar 717.60 dn 16.70
SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Monday, but regained much of the losses incurred earlier in the session.
ADM announced today that it will build a US$350 million soybean crushing plant near Spiritwood, North Dakota. The facility is to be operational in 2023 and is to have the capacity to crush approximately 4,100 tonnes per day.
Rain during the last few days over most of the major growing areas of the United States was driving down prices for soybeans and other commodities.
Ahead of the weekly crop progress report from the U.S. Department of Agriculture (USDA), soybeans planted were expected by the trade to be 36 to 46 per cent complete.
The USDA’s weekly export inspections report cited 236,918 tonnes of soybeans were shipped as of May 6. That’s up sharply from last week’s marketing year low of about 144,000 tonnes.
The department is scheduled to issue its monthly supply and demand estimates on Wednesday. The report will include the USDA’s first official look at its projections for 2021/22.
CORN futures were weaker on Monday, due to improved crop conditions.
Trade expectations have called for corn planted to be 62 to 71 per cent complete.
Weekly export inspections of corn amounted to nearly 1.71 million tonnes, which was down 23 per cent from the previous week.
The USDA reported China has cancelled 280,000 tonnes of corn in a sale for 1.02 million tonnes.
China reported its corn imports are to be 20 million tonnes in 2021/22; citing increased domestic acres planted will reduce the amount required from overseas.
AgRural has slashed its call on Brazil corn production by 7.6 per cent, bringing the consultancy’s estimate down to 95.5 million tonnes.
WHEAT futures were weaker as well on Monday, as weekend rain provided a much needed boost.
U.S. weekly wheat exports were 545,587 tonnes.
In international purchases, South Korea bought 60,000 tonnes of feed wheat from the Black Sea Region.
