North American Grain and Oilseed Review: Loonie, Chicago soy drive down canola prices

By Glen Hallick, MarketsFarm

WINNIPEG, Dec. 11 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished weaker on Wednesday, due to a stronger Canadian dollar and declines in the Chicago soy complex.

By mid-afternoon, the loonie rose to 75.92 U.S. cents compared to Tuesday’s close of 75.57.

There were losses across the board today in the soy complex at the Chicago Board of Trade, which included soyoil bids losing nearly a quarter of a U.S. cent.

Despite canola being lower on Wednesday, a Winnipeg-based trader said bids have remained range-bound, noting that could continue for the next several months.

There were 35,216 contracts traded on Wednesday, which compares with Tuesday when 29,352 contracts changed hands. Spreading accounted for 25,154 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 453.50 dn 5.30
Mar 462.80 dn 5.20
May 470.70 dn 5.20
Jul 476.60 dn 5.20

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Wednesday, due to a lack tangible movement in the United States/China trade war.

Optimism regarding the Phase One deal faded as it’s built almost entirely on rumours, commented MarketsFarm Director of Markets and Weather Bruce Burnett. Although China eliminated its tariffs on U.S. soybean imports earlier this week, U.S. President Donald Trump is now unclear if he will cancel tariff hikes on Chinese imports scheduled for Dec. 15.

The U.S. Department of Agriculture (USDA) reported this morning private sales of soybeans, with 585,000 tonnes to China and 140,000 tonnes to unknown destinations. Deliveries for both are to be during the current marketing year.

Ahead of the USDA’s weekly export sales report tomorrow, available trade guesses called for soybeans to range from 500,000 to 700,000 tonnes. Soymeal was between 125,000 to 225,000 tonnes and soyoil from 10,000 to 20,000 tonnes.

The U.S. Federal Reserve announced on Wednesday that key interest rates were frozen at 1.50 to 1.75 per cent. The Fed also forecast rates to remain such throughout 2020.

Argentina reported its soybean planting reached 53 per cent complete, which is four points behind the average pace.

CORN futures were weaker on Wednesday, following soybeans.

The U.S. Energy Information Administration reported ethanol production was up 11,000 barrels to 1.072 million barrels per day. Ethanol stocks increased 1.176 million barrels to now 21.815 million.

Market expectations for corn export sales were from 450,000 to 600,000 tonnes.

Argentina said its corn planting was now 56 per cent finished, which is close to the average pace.

WHEAT futures were narrowly mixed on Wednesday, with losses in Chicago, as Kansas City incurred a small decline and Minneapolis was up a pinch.

Trade predictions for wheat export sales were from 200,000 to 400,000 tonnes.

France Agrimer raised its estimate of French soft wheat exports for this year by 1.67 per cent to now 12.2 million tonnes.

Futures Prices as of December 11, 2019

Canola
Price Change
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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