North American Grain and Oilseed Review: Phase One provides some support for canola

By Glen Hallick, MarketsFarm

WINNIPEG, Dec. 13 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished higher on Friday, getting limited support from the Chicago soy complex.

While the United States/China Phase One trade deal provided a measure of support prices at to the Chicago Board of Trade, it was difficult to sustain a rally, according to a Winnipeg-based trader. That’s because there were virtually no details of the agreement made public.

It’s known the U.S. cancelled tariff hikes that were scheduled for Sunday. Also, that China is to buy an amount of agricultural products, including soybeans and corn, from the U.S.

The trader noted that increases in canola prices continued to lag behind gains in the soy complex.

Farmer deliveries of canola increased slightly from the previous week, he said.

By mid-afternoon, the loonie was steady at 75.81 U.S. cents compared to Thursday’s close of 75.86.

There were 40,615 contracts traded on Friday, which compares with Thursday when 42,057 contracts changed hands. Spreading accounted for 36,864 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Jan 461.00 up 1.90
Mar 469.90 up 1.70
May 478.50 up 2.20
Jul 484.50 up 2.50

SOYBEAN futures at the Chicago Board of Trade (CBOT) were higher on Friday, getting some support from the Phase One trade deal.

The initial euphoria surrounding the United States/China trade deal largely fizzled out as there were too few details about the Phase One agreement for the markets to sustain a stronger rally. Although U.S. President Donald Trump boasted about the deal in his tweets, Chinese officials at a press conference didn’t expand on what the deal includes. It’s known that Trump won’t impose tariff hikes that were scheduled for Sunday, and that China will purchase U.S. agricultural products including soybeans and corn.

The U.S. Department of Agriculture (USDA) reported soybean export commitments were at 56 per cent of its projection for this marketing year. That’s 13 points behind the average pace.

Brazil reported its soybean exports are expected increase to 75.0 million tonnes, a gain of 3 million over last year.

Soybean planting in Argentina reached 61 per cent complete.

CORN futures were higher on Friday, getting some support from soybeans.

Corn exports were at 33 per cent of the USDA’s estimate for the current marketing year; however they were 17 points behind the average pace.

Corn planting in Argentina hit 55 per cent finished.

WHEAT futures were steady to higher on Friday, with small gains for Chicago and Minneapolis, while Kansas City was unchanged.

The USDA reported wheat exports reached 64 per cent of its 975 million bushel target. That’s 11 points behind the normal pace. The USDA said bookings averaged 472,000 tonnes per week during the first half of the marketing year, with shipments averaged almost 475,600 tonnes.

Wheat acres in the U.S. could to drop to a 110-year low, according to a news report. The 45.2 million acres planted in 2019 were at a 100-year and were about 20 million
less than the year before. The report said low prices were largely to blame.

The Argentina wheat harvest reached 61 per cent complete. Expectations are for production to top 18.5 million tonnes.

Commodity Future Prices

Canola
Price Change

Prices are in Canadian dollars per metric ton

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