North American Grain and Oilseed Review: Steep declines in record volume

By Glen Hallick, MarketsFarm

Glacier Farm Media MarketsFarm – Intercontinental Exchange canola futures fell hard in a massive sell-off on Tuesday but managed to pull away from earlier limit down losses.

China’s announcement of it launching an investigation in possible canola dumping by Canada was in response for the federal government hiking electric vehicle imports from China by 100 per cent and upping those for steel and aluminum by 25 per cent.

An analyst cautioned that the market needs not overreact because China has few options for purchasing canola in the world market. Crops in the European Union, Ukraine and Australia are smaller this year.

At 4.92 million tonnes, China was Canada’s largest canola customer in 2023/24, accounting for almost 72 per cent of export sales. The analyst said projections placed China’s 2024/25 canola imports from Canada at about five million tonnes.

The analyst also warned that canola yields in Alberta are below those forecast by Statistics Canada. That may lead to the country’s canola production coming in below StatCan’s call of 19.50 million tonnes.

Sharp losses in Chicago soyoil and more moderate declines in Malaysian palm oil added to the downturn. However, European rapeseed ended the day mixed. Meanwhile, a measure of support came from gains in Chicago soybeans and soymeal.

Crude oil also took a tumble on Tuesday, due to increased concerns about China’s lackluster economy, which added more pressure onto oilseed values.

The Canadian dollar was weaker at mid-afternoon Tuesday with the loonie falling to 73.81 U.S. cents compared to Friday’s close of 74.12.

There were 124,793 contracts traded on Tuesday, shattering the previous record. On Friday, 42,252 contracts that changed hands and spreading accounted for 55,916 contracts traded.

Prices are in Canadian dollars per metric tonne:

                        Price     Change

Canola          Nov     590.90    dn 23.80

                Jan     603.00    dn 20.80

                Mar     612.70    dn 16.10

                May     620.00    dn 12.20

SOYBEAN futures at the Chicago Board of Trade were stronger on Tuesday, buoyed by export sales. Soymeal also swung higher, but soyoil incurred sharp losses.

The United States Department of Agriculture announced a private sale for 132,000 tonnes of new crop soybeans to China.

The USDA issued its exports inspections report and for the week ended Aug. 29, outbound movements of soybeans came to 496,860 tonnes, up from the previous week’s 419,563. However, at 44.71 million tonnes the year-to-date tally remained far behind last year’s 52.28 million.

The department released its fats and oils report showing the July soybean crush exceeded the average guess of 192.14 million bushels at 193 million. A year ago 184 million bushels were crushed. Soyoil production came to 2.3 billion pounds, up six per cent from the previous July.

Strategie Grains cut its call on European Union rapeseed production for 2024/25 by 340,000 tonnes at 16.9 million. That’s down 15 per cent from a year ago. The consultancy also reduced its sunflower seed projection by 300,000 tonnes at 9.3 million, down four per cent from 2023/24.

The European Commission forecast the 2024/25 EU rapeseed crop at 18.0 million tonnes.

While the Australian Bureau of Agriculture and Resource Economics and Sciences bumped up the country’s 2024/25 canola production by 100,000 tonnes at 5.5 million, that would still be eight per cent less than the previous year.

CORN futures were higher on Tuesday, due to increased exports and domestic use.

The USDA reported corn export inspections of 965,292 tonnes, improving upon last week’s 917,602. The year-to-date climbed to 52.03 million tonnes, well ahead of the year ago of 37.26 million.

In the USDA’s grain crushings report, 474 million bushels of corn were used in July for producing ethanol, up 12 per cent from a year ago.

The department’s attaché in Brasilia reported ethanol production in Brazil in calendar year 2024 is to amount to 25.5 billion liters of cane ethanol and seven billion of corn ethanol. Biodiesel output was placed at 8.9 billion liters, up 18 per cent from a year ago.

AgRural placed the planting of Brazil’s first corn crop for 2024/25 at eight per cent complete, five points back of this time last year.

The Rosario Grain Exchange said recent rain in Argentina will help its corn crop, and the exchange is expecting production of 49.0 million tonnes.

WHEAT futures were higher on Tuesday, catching spillover from soybeans and corn.

U.S. wheat export inspections were 577,944 tonnes, nudging up from 549,467 last week. The year-to-date of 5.74 million tonnes maintained its lead over the 4.35 million this time last year.

ABARES upped its call on the country’s wheat output by 2.7 million tonnes, bringing its projection to 31.8 million.

Ukraine announced it will limit wheat exports for 2024/25 to 16.2 million tonnes.

Low water levels on the Rhine River in Germany has vessels reducing their loads.