“It’s hard to have a real solid opinion of whether we’ll go up or go down, because you could easily make a case either way,” said analyst Mike Jubinville, of MarketsFarm.

“Is there room to go (lower)? absolutely,” Jubinville said, adding “are we oversold and due for a bounce? Absolutely.”

Canola has lost about 45 per cent from its highs of the past year, with similar losses seen in Chicago soyoil, said Jubinville. However, he noted European rapeseed is down by 61 per cent from its own highs. While canola is usually the leader in the relationship with European rapeseed, the past six months has been the other way around and Jubinville thought the weakness in rapeseed could leave canola open to more downside as well.

Looking at the weekly chart, Jubinville expected the July canola contract that settled at $649.50 per tonne on Wednesday could easily drop into the $500 per tonne area. On the other side, a correction to the 20- or 50-day moving averages would see prices move back above $700 but would still leave the market in a long-term downtrend.

Crush margins are off their highs of the past year but remain attractive from the processor’s perspective, which should remain supportive, although Jubinville said there was increasing competition from other oilseeds in the export market.

With expectations for large crops already being priced into the markets, “if we fall short in any way, then we have room for a bounce,” said Jubinville.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

The post ICE weekly outlook: Hard to know where canola will go appeared first on Country Guide.

The Indian government expected about 11.5 million tonnes of chickpeas, but the harvest might bring in less than 10 million tonnes, with the possibility of sliding under nine million, he said.

Even the country’s red lentil harvest “may have not been up to snuff,” he said.

“There’s no hard and fast numbers on this yet. It’s too early to know for sure,” Jubinville said, noting heavy rains at the wrong time could be the main culprit on reduced production.

On top of current harvest woes, India’s production of pigeon peas and green lentils “wasn’t as big as expected,” he said.

“India, like China, is a big black hole of information and we just get snippets here and there.”

Jubinville believes all of these shortcomings could result in India reducing or even lifting its import tariffs on pulses. He predicted that if such a move were to come, it would be between now and sometime during the summer.

In addition to tariffs, India also has tonnage limits, such as a strict limit of 150,000 tonnes of yellow peas per year, regardless of the price. With pulse prices in India swinging upward, such limits could be reduced or lifted as well, Jubinville suggested.

“If we get some movement to trading more pulses into India, that may not necessarily mean a great swing of [import] tonnage.”

Conversely, if India returns to the international market looking to purchase pulses, “that sends the signal, a shot across the bow if you will, to all the major importers of pulses that India is back, at least for some period of time,” Jubinville said.

— Glen Hallick reports for MarketsFarm from Winnipeg.

The post Pulse weekly outlook: Harvest shortcomings could open doors to India appeared first on Country Guide.

In StatsCan’s survey-based principal field crop areas report, released Tuesday, the federal agency pegged canola acres for 2021-22 at 21.53 million, up 3.6 per cent over the estimated acres seeded in 2020-21. Trade predictions obtained by MarketsFarm called for 21.5 million to 23.2 million acres of canola this year.

“You plug in a number like that in to the supply and demand balance, and as tight as we are for ending stocks in this marketing year, that’s just not enough [canola] acres to satisfy what the market is going to want for next year,” Jubinville said.

“The tight stocks scenario for canola continues well into next year and maybe the year after that.”

As well, Jubinville suggested Statistics Canada likely has understated the amount of acres that will be eventually seeded this spring.

“The message has to be sent loud and clear — we need more acres,” he said, noting a bullish result did not emerge from a bullish estimate. While old-crop prices continued their upswing, new-crop prices were lower.

“It just goes to show there are bigger global issues at work, and canola as well as Canada are simply followers of these big, epic tidal moves in the marketplace,” Jubinville said.

As for other crops, Statistics Canada called for total wheat acres to fall 6.9 per cent in 2021-22 at 23.26 million. However, the amount of durum projected to be planted bumps up nearly 0.3 per cent, at more than 5.7 million.

The federal agency pegged barley acres to increase 13.9 per cent at 8.61 million. Meanwhile oats are expected to slip from 3.84 million acres in 2020-21 to 3.61 million for 2021-22.

Table: StatsCan preliminary estimates of field crop areas for 2021, released April 27, in thousands of acres, with 2020 figures for comparison. Source: Statistics Canada.

Note: Winter wheat numbers are for area remaining after winterkill.

The post StatsCan’s projected canola area on low side of expectations appeared first on Country Guide.

“We are in the middle of a demand-pull market… and the market has not yet done what it needs to do to accomplish the task of curtailing demand,” MarketsFarm Pro analyst Mike Jubinville said.

“We’re rapidly running out of canola on this side of the border,” he added, noting soybean supplies in the U.S. were also tightening.

“Even at record-high futures prices, basis levels for summer delivery are as much as $85 above the futures… which shows the demand is extraordinary,” he said.

Reports of Canadian crushers importing Ukrainian canola for delivery sometime this summer highlighted the tight supply situation.

Seeded canola area in Canada is generally expected to be up on the year, with Statistics Canada due to release its first survey-based acreage estimates on Tuesday (April 27). However, agronomic issues will likely limit the extent of the acreage increase.

Even with increased acres, “the demand pull in the market is so strong that we won’t be rebuilding inventory next year,” said Jubinville.

However, he noted, canola was looking overbought from a chart standpoint, which could lead to a profit-taking correction.

That said, it’s still too early for a sustained downward move, with every move lower a buying opportunity for the time being.

“(Canola futures) don’t have to be higher every day, but the trend is up until it tells us different,” Jubinville said.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

The post ICE weekly outlook: Canola’s uptrend still intact appeared first on Country Guide.

The survey was completed in early June “and may not have captured all of the seeding delays and potential shifts that may have happened in central/northern Alberta and northwestern Saskatchewan because it was too wet,” said analyst Mike Jubinville of MarketsFarm Pro.

Total canola area for 2020-21 was pegged at 20.778 million acres, which was at the higher end of trade estimates but still slightly below the 20.956 million acres seeded the previous year.

Jubinville expected the canola acres could be trimmed a little more, with some of that area going into barley or oats, but didn’t expect it would be enough to shift the market.

“The attention to yield will be a more important going forward,” he said adding that any more “nickel-and-diming” in acreage estimates wouldn’t likely be enough to change the market sentiment too much.

StatsCan forecast total wheat area at 24.971 million acres, down about 500,000 from the previous estimate. Of that total, spring wheat was pegged at 17.926 million acres. That would be down from both the previous estimate and the year-ago level. However, durum was revised higher, at 5.689 million acres.

Lentils were also revised higher from an earlier estimate, with the projected 4.233 million acres up 12 per cent on the year.

“The economics of growing lentils looks more attractive going into this growing season than it has in the last number of years,” said Jubinville.

Table: A recap of Statistics Canada’s survey-based report on planted acres as of June 11, 2020. Pre-report expectations are provided for comparison purposes. Figures are in millions of acres.

* — “All wheat” includes spring wheat, durum wheat, and winter wheat remaining after winterkill.

The post Attention turns to yield potential after StatsCan report appeared first on Country Guide.

Canada’s actual seeded area is expected to see some shifts from the projections released Thursday.

“As a result of the timing of the COVID-19 pandemic, these estimates were produced in March 2020 under exceptional circumstances,” StatsCan said in the report, while highlighting a lower than usual response rate.

The report was originally scheduled to be released in April, but was delayed to Thursday.

“At this time, intended seeded area estimates cannot reflect the full impact on the crop sector as a result of COVID-19,” StatsCan said, adding that “over time, as seeded area estimates are revised based on new data, users will be able to see a more comprehensive view of the impacts on seeding and production.”

While revisions are likely, the projections were still largely in line with market expectations.

However, one crop that stood out was lentils, with the government agency forecasting a slight 1.9 per cent reduction in seeded area at 3.709 million acres.

“I have a feeling that the lentil number will look a lot different by the time we get to the final acreage report,” MarketsFarm Pro analyst Mike Jubinville said, noting red lentil prices have seen considerable strength since the survey was conducted.

Peas and durum have also seen solid prices over the past month, with increase from the projected 4.279 million pea acres and 5.228 million durum acres also likely.

On the other side, Jubinville expected any increases in durum area would come at the expense of other spring wheat. Total wheat acres were estimated at 25.427 million, which would be up 3.3 per cent on the year.

Canola plantings were forecast to be down by 1.6 per cent on the year, at 20.615 million acres. Jubinville expected canola was another crop that may see slightly lower area in subsequent reports.

StatsCan on Thursday also released a report on stocks of principal field crops as of March 31, 2020. The data showed canola stocks of 8.925 million tonnes, down 12.3 per cent from the same time the previous year.

Jubinville saw the smaller canola number as a sign that canola carryout for 2019-20 may end up a bit tighter than some of the more bearish projections, especially as both export and domestic crusher demand has been solid so far.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

Table: A recap of Statistics Canada’s acreage report as of March 31, 2020. Pre-report expectations are provided for comparison purposes. Figures are in millions of acres.

* – “All wheat” includes spring wheat, durum wheat and winter wheat remaining after winterkill

The post Adjustments likely ahead for StatsCan’s early acreage estimates appeared first on Country Guide.

The U.S. Department of Agriculture holds its Agriculture Outlook Forum on Feb. 20-21. USDA’s first acreage and supply/demand estimates for the upcoming 2020-21 crop year will be released at the forum, and traders will be following those numbers closely.

“The downside (in soybeans and corn) is limited until we get on the other side of (the forum),” said Rich Feltes, of RJ O’Brien in Chicago.

“On the flipside, any gains will be contained by the fact that South American crop production is improving, and it may be later, rather than sooner, that we see China come in on Phase One.”

MarketsFarm Pro analyst Mike Jubinville agreed the looming South American harvest will displace U.S. soybean sales to China for the time being, with any significant increased business tied to the trade agreement likely not coming until September.

Expectations that U.S. farmers will plant more soybeans and corn this spring — as unplanted acres from 2019 go back into production — will also limit the upside potential in the futures, according to both Jubinville and Feltes.

“There’s not a lot for our market to do right now,” said Feltes.

“We’re rangebound, marking time and waiting for the next big thing to come,” he added, noting the next market-moving influence will likely be U.S. spring weather patterns.

— Phil Franz-Warkentin reports for MarketsFarm in Winnipeg.

The post CBOT weekly outlook: Soy, corn wait for next big thing appeared first on Country Guide.

The Phase One trade deal signed Wednesday between the U.S. and China failed to give the grain and oilseed markets a boost, as the vague details of the actual agreement do not live up to some of the claims coming out of the White House.

“There is a lack of confidence in the marketplace as to what this all means right now,” MarketsFarm Pro analyst Mike Jubinville said of the trade deal. Industry participants were still waiting to see China step forward with large purchases of soybeans, he added.

With larger-than-expected U.S. soyoil stocks also reported on Wednesday, the resulting losses in the U.S. futures spilled into the canola market.

Canola futures broke below a number of notable trend-line support levels on Wednesday, which could open the door to additional losses, according to Jubinville.

Jubinville placed nearby support in the March canola contract at around $470-$473. It settled Wednesday at $475.80, after reaching a three-month high of $485 only four days earlier.

“This is still a sideways trending market… nothing has changed,” said Jubinville.

While confirmed Chinese soybean purchases or weather problems in South America could spark the oilseed markets higher, he expected the market may have peaked at least until attention returns to the new crop and North American spring seeding.

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

The post ICE weekly outlook: Canola off highs, rangebound appeared first on Country Guide.

Canola broke out of a six-day funk Wednesday, trending just slightly higher for the first time since Wednesday last week. Technical biases remain to the downside, as prices hover around contract lows.

“There are a lot of balls in the air,” said Mike Jubinville, an analyst with MarketsFarm.

About a quarter of the Prairie region has experienced challenging growing conditions that will result in “lesser than average” yield potential, he said.

About 15 per cent of the key canola-growing region is in the “transitional stage, where you have some good and some bad,” and the rest of the region will have the potential for strong yields.

Harvest activity often pressures prices at this time of year, due to the surge in farmer deliveries.

“Just the same, it’s certainly discouraging for a lot of growers who are looking at some of the worst canola prices in years,” Jubinville said.

Unco-operatively cool and wet weather has the potential to damage crops before they come off the field, which could inject a weather premium back into the market.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

The post ICE weekly outlook: Canola breaks out of week-long funk appeared first on Country Guide.

Additional shifts are also likely in subsequent reports, as dry conditions in southern Alberta and Saskatchewan may alter some intentions.

Statistics Canada forecast canola area for 2019 at 21.3 million acres, which would be down by 1.5 million acres from the previous year and the five-year average of 21.7 million.

“A good portion of the acreage cut is associated with drier conditions in the southern Prairies, that are not the prime canola areas,” said Mike Jubinville of MarketsFarm Pro.

Trade troubles with China also added to farmer sentiment of adjusting rotations away from canola in those dry areas and could lead to more acreage trimming, he said.

Much of the area lost to canola will be seeded to wheat, according to the Statistics Canada data, with total wheat acres forecast at 25.7 million, up from 24.7 million seeded in 2018. Of that total, durum area is forecast to decline by one million acres, hitting five million.

However, area seeded to other spring wheat, which includes Canada hard red spring (CWRS) wheat, is expected to increase by about two million acres at 19.4 million.

“Yield and quality of this year’s crop will count more than the acreage put in,” said Jubinville.

Barley area was forecast at 7.2 million acres, coming in well above the 6.5 million acres seeded in 2018 and the previous five-year average of 6.3 million.

Errol Anderson of ProMarket Communications in Calgary said the 10 per cent increase in barley area was at the higher end of trade estimates, and would be bearish for prices.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

Table: A recap of Statistics Canada’s acreage report as of March 31, 2019, in millions of acres. Pre-report expectations provided for comparison purposes.

* – Total wheat includes spring wheat, durum wheat, and winter wheat remaining after winterkill

The post StatsCan confirms smaller canola acres, more wheat appeared first on Country Guide.