By Glen Hallick, MarketsFarm
WINNIPEG, Dec. 9 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were slightly higher on Monday, getting support from the Chicago soy complex. For much of the session gains had been much stronger before tapering off.
A trader said Statistics Canada’s crop production report released on Friday had little, if any, effect on canola prices. Rather, canola has been performing poorly lately with support largely coming from the Chicago Board of Trade, and to a lesser extent, Malaysian palm oil.
The trader cited the only benefit from the report was the carryover for canola was cut by 700,000 tonnes.
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He said canola prices could continue to rise should there be further gains in soyoil. However, a stronger Canadian dollar could temper or reverse increases for canola.
The Canadian dollar was stronger this afternoon, at 75.56 U.S. cents, compared to Friday’s close of 75.44.
There were 32,161 contracts traded on Monday, which compares with Friday when 50,892 contracts changed hands. Spreading accounted for 24,708 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Jan 459.10 up 0.70
Mar 468.10 up 1.10
May 475.80 up 1.40
Jul 481.50 up 1.50
SOYBEAN futures at the Chicago Board of Trade (CBOT) were stronger on Monday, following good export inspections.
The United States Department of Agriculture (USDA) reported soybean export inspections so far this marketing year are 17.298 million tonnes, which is almost 22 per cent more than this time in the 2018/19 marketing year.
On the U.S./China trade front, China called on the U.S. to not only cut or eliminate existing tariffs on Chinese imports, but to cancel a planned tariff hike scheduled for Dec. 15. The U.S. wants China to purchase a set amount of agriculture products, and to keep some tariffs in place for the tentative Phase One agreement and subsequent agreements.
The USDA is scheduled to release its next supply and demand report on Tuesday. The World Agricultural Supply and Demand Estimates (WASDE) for December are widely expected to be a non-factor in the markets, with little change from November’s data. The January WASDE is said to be the report the markets will be watching.
Also on Tuesday, Conab releases its latest production estimates for Brazil’s soybean and corn crops. Market expectations projected an increase for soybeans from Conab’s November estimate of 120.86 million tonnes.
CORN futures were steady to lower on Monday, as export inspections have been significantly behind last year’s pace.
So far this marketing year only 6.532 million tonnes of corn have been exported, for a drop of almost 57 per cent compared to this time in 2018, according to the USDA.
The average trade guess for the 2019/20 corn carryout in Tuesday’s WASDE was pegged at 1.910 billion bushels.
Most traders expect for Conab’s estimate for Brazilian corn production to exceed the 98.37 million tonnes from last month.
WHEAT futures were mixed on Monday, with Chicago steady to lower and Kansas City weaker, while Minneapolis was up slightly.
The USDA reported export inspections for wheat amounted to 13.017 million tonnes so far this marketing year.
Trade guesses for the WASDE tomorrow have called for the U.S. wheat carryover to be from 964 million to 1.05 billion bushels. The world carryover is expected to range from 284 million to 290 million tonnes.
Ukraine reported its 2019 grain exports jumped 31 per cent compared to the previous year to 26 million tonnes. Wheat alone accounted for 13.7 million tonnes this year, compared to 9.5 million in 2018.
France reported that 83 per cent of its wheat crop has been planted, which is slightly behind pace.
FCStone dropped its production estimate of Australia’s 2019/2020 wheat crop to 14.97 million tonnes, down from the government’s official estimate of 15.85 million. Drought conditions have continued to wreak havoc in most of Australia’s growing areas.
