North American Grain and Oilseed Review: Canola gets a reprieve from steep declines

By Glen Hallick, MarketsFarm

Glacier Farm Media MarketsFarm – Intercontinental Exchange canola futures closed higher on Thursday after incurring two days of sharp losses.

A trader commented canola followed the product values today as the China situation took a pause. Also, he alleged Statistics Canada of messing up canola since the agency released its principal field crops report on Aug. 28. He said StatCan’s revisions to canola for the two previous crop years show that the agency’s model-based system is not functioning properly.

StatCan is scheduled to publish its grain stocks as of July 31 report on Monday, followed by its updated principal crops report a week later.

There was support for canola from gains in Chicago soyoil and soybeans, as well those in European rapeseed and Malaysian palm oil. Declines in Chicago soymeal attempted to put a lid on further upticks in canola.

Crude oil was relatively steady in choppy trading on Thursday, as it currently offered little direction to the oilseeds.

Following the weekend, the Prairies are forecast to get hot, dry weather for the next 14 days, making for good harvest conditions.

Saskatchewan reported its harvest reached 42 per cent complete overall, with the province’s canola at 16 per cent finished.

The Canadian dollar was higher by mid-afternoon Thursday with the loonie at 74.04 U.S. cents compared to Wednesday’s close of 73.94.

There were 48,919 contracts traded on Thursday, compared to 60,704 on Wednesday. Spreading accounted for 28,228 contracts traded.

Prices are in Canadian dollars per metric tonne:

                        Price     Change

Canola          Nov     587.90    up  8.20

                Jan     599.90    up  8.70

                Mar     610.90    up  9.30

                May     618.50    up  9.30

SOYBEAN futures at the Chicago Board of Trade turned around to finish on Thursday, helped by spillover from strong gains in soyoil.

The United States Department of Agriculture reported two private sales of new crop soybeans. One is for 126,000 tonnes to China and the other is for 189,700 tonnes to unknown destinations.

Due to the Labour Day holiday, the USDA postponed its export sales report to Friday. Projections for old crop soybean sales ranged from net reductions of 200,000 tonnes to net sales of 200,000 tonnes. New crop sales are to be 800,000 to two million tonnes. Soymeal sales are expected to be 150,000 to 650,000 tonnes and soyoil at zero to 20,000 tonnes.

The U.S. Coast Guard reported several barges recently ran aground on the Mississippi River due to low water levels, which are forecast to continue dropping until mid-September.

While StoneX trimmed its U.S. soybean yield estimate by 0.4 bushels per acre, it raised its production forecast by 92 million bushels on increased acres, bringing it to 4.58 billion bushels.

China requested the U.S. remove its tariffs on Chinese imports. The U.S. said it will wait to see what action China could take. Earlier this week, China launched an investigation to determine whether Canada has been dumping canola or not. That move was in reaction to sharp hikes in tariffs on Chinese electric vehicles, something the U.S. has done.

Consultancy Patria AgroNegocios projected Brazil’s 2024/25 soybean production at 166.72 million tonnes, 15.5 per cent more than last year’s harvest. As well, it estimated planted soybean area at 46.45 million hectares up 1.7 per cent from its 2023/24 call.

CORN futures were lower on Thursday due to a dip in ethanol production.

The U.S. Energy Information Administration reported ethanol output for the week ended Aug. 30 averaged 1.06 million barrels per day, down 10,000 BPD. Ethanol stocks fell 218,000 barrels at 23.35 million.

StoneX upped its projection for U.S. corn yields by 0.6 bu./ac. at 182.9. However, it reduced production by 80 million bushels at 15.13 billion on less planted acres.

Ahead of tomorrow’s export sales report, the average trade guess put old crop corn sales at net reductions of 100,000 tonnes to net sales of 200,000 tonnes. Those for new crop are 700,000 to 1.40 million tonnes.

WHEAT futures were mixed on Thursday with losses for Chicago and Kansas City and gains for Minneapolis.

The winter wheat growing areas of the U.S. have been forecast to get little if any rain in the coming days.

Export sales of U.S. wheat are projected to be 300,000 to 600,000 tonnes.

French exporter group AGPB said the country’s wheat harvest is to be 25.98 million tonnes, down from 35.08 million last year. The French agriculture ministry estimated this year’s crop at 26.32 million tonnes.