North American Grain and Oilseed Review: Great pressure on canola

Intercontinental Exchange canola futures were weaker on Friday after seeing another round of sharp losses, as the China situation reared its head again.

Earlier this week China said its planning an investigation into possible canola dumping by Canada. This announcement came after Canada hiked tariffs on electric vehicles imported from China, as imports of their steel and aluminum.

Adding to canola’s pull back were significant declines in the Chicago soy complex, European rapeseed and Malaysian palm oil. The downturn in crude oil spilled over into the vegetable oils.

An analyst said canola yields on the Prairies could improve as the harvest moves further north. However, he noted it’s unlikely any improvements will reach Statistics Canada’s estimates from the end of last month.

StatCan is set to publish its grain stocks as of July 31 report on Monday morning. Canola stocks are expected to be much higher than a year ago.

A stretch of dry weather will help to see the Prairie harvest pick up its pace.

With the effects of the China situation yet to be felt, the Canadian Grain Commission reported producer deliveries of canola after four weeks into the 2024/25 crop year are nearly 1.31 million tonnes versus 709,100 tonnes a year ago. At a year-to-date of 1.01 million tonnes, canola exports are far ahead of the 297,100 tonnes this time last year. Domestic use was ahead as well at 869,200 tonnes compared to 757,700.

The Canadian dollar was falling back by mid-afternoon Friday with the loonie at 73.73 U.S. cents compared to Thursday’s close of 74.00.

There were 34,572 contracts traded on Friday, compared to 48,919  on Thursday. Spreading accounted for 18,086 contracts traded.

Prices are in Canadian dollars per metric tonne:

                        Price     Change

Canola          Nov     569.20    dn 18.70

                Jan     580.90    dn 19.00

                Mar     592.20    dn 18.70

                May     600.50    dn 18.00

SOYBEAN futures at the Chicago Board of Trade were weaker on Friday as part of a general downturn in the world oilseed market.

The United States Department of Agriculture issued its export sales report, postponed by one day due to the holiday on Monday. Old crop soybean sales incurred net reductions of 228,000 tonnes, hitting a marketing-year low and a little below the low end of trade guesses. New crop sales were within market expectations at nearly 1.66 million tonnes. Old crop soymeal sales were all of 40,900 tonnes and those for new crop came in at 434,700 tonnes. Soyoil had old crop sales of 1,900 tonnes and 3,300 of new crop.

The USDA attaché in Beijing estimated China’s soybean production for 2024/25 at 19.6 million tonnes and imports of 103.0 million. The forecasts are close to equal to China’s 2023/24 soybeans. Also, the Beijing desk projected China’s 2024/25 rapeseed crop at 15.80 million tonnes, slightly higher than a year ago. Imports are expected to hold at four million tonnes.

The department’s attaché in New Delhi predicted India’s 2024/25 soybean crop at 12.85 million tonnes, a pinch higher than the previous year. Production of soyoil is to nudge up to 2.2 million tonnes and soymeal output is to rise to 9.36 million tonnes. Meanwhile, India’s palm oil imports are to remain steady at 9.60 million tonnes.

A report said Brazil’s July soybean exports were 8.04 million tonnes, down 4.1 per cent from the previous July.

CORN futures were lower on Friday, adding on to yesterday’s losses.

Export sales of U.S. old crop corn had net reductions of 173,100 tonnes and well below trade projections, but new crop sales of 1.82 million tonnes, exceeding market guesses.

Safras and Mercado projected Brazil corn plantings for 2024/25 at 51.57 million acres with production rising to 133.57 million tonnes.

The Buenos Aires Grain Exchange pegged Argentina’s planted corn area at 15.57 million acres, down 17 per cent from a year ago. Ongoing dry weather is expected to curtail development of all of Argentina’s crops.

WHEAT futures dropped back on Friday following less than ideal export sales.

U.S. wheat export sales tallied 340,000 tonnes of old crop, a little under market predictions, and there were new crop net reductions of 10,500 tonnes.

France reported its soft wheat yields are the smallest since the 1980’s, but test weights rose two points at 28 per cent above the common standard of 96 kilos per hectoliter. However, that’s far below the average of 76 per cent.

Statistics Canada is expected to place Canadian wheat stocks as of July 31 at 3.56 million tonnes compared to 3.51 million a year ago.

A state of emergency was declared in the Siberian oblast of Tomsk where more than 7,400 acres of crops have been destroyed by waterlogging.