North American Grains and Oilseeds Review: Canola struggling to find strength

By Ashley Robinson, Commodity News Service Canada
Winnipeg, Dec. 12 (CNS Canada) – The ICE Futures canola platform closed mixed, failing to find strength from the soy complex.
Chicago Board of Trade (CBOT) soybean, oil and meal contracts all finished the day stronger. Reuters reported during the trading session that China made its first major United States soybean purchase in more than six months today. Chinese state-owned companies bought at least 500,000 tonnes of U.S. soybeans, in deals valued at more than $180 million. However, the market didn’t jump in reaction to the news.

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Canola has been struggling to find strength from the firming soy complex. A few months ago canola was regarded as overpriced, however crush margins have improved and canola is now considered cheaper. That’s why it hasn’t been able to follow the soy market, according to an analyst.
The Canadian dollar was stronger today at canola market close, which weighed on the canola contracts.
About 31,061 canola contracts traded, which compares with Tuesday when 27,727 contracts changed hands. Spreading accounted for 26,774 of the contracts traded.
The U.S. Department of Agriculture (USDA) announced a flash sale of 130,632 tonnes of soybeans to Mexico and 110,000 tonnes of soybeans to unknown destinations this morning. Many mused this was buyers trying to lock in soybean purchases while they are still cheap before China starts buying again.
In other China news, soybean processors there are facing their lowest crush margins in 18 months. This is supposedly due to poor soymeal demand from overstocking by buyers and a drop in feed usage for hogs because of the African swine fever outbreak.
CBOT corn prices finished the day mixed.
Corn for ethanol usage was lowered 50 million barrels in yesterday’s USDA report; however prices still managed to eke out a small price gain on the day.
Wheat futures in the U.S. finished the day mixed.
Egypt has a tender out for soft and/or milling wheat for shipment from Feb. 1 to 10.
Iraq bought 50,000 tonnes of U.S. wheat in a tender last week.