North American grain/oilseed review: Canola drops sharply lower

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market was sharply weaker on Monday, falling below nearby support to its weakest levels in a month as stops were hit on the way down.

Losses in Chicago soybeans and soyoil accounted for some spillover weakness in the Canadian oilseed. European rapeseed futures were also lower, while the Malaysian palm oil market was closed for a holiday.

Relatively favourable Prairie weather conditions contributed to the declines.

Australia’s agriculture department, ABARES, pegged the country’s 2024/25 canola crop at 5.4 million tonnes, which would be down from an earlier estimate of 6.1 million and slightly below the year-ago level of 5.7 million tonnes but still 21 per cent above the 10-year average.

There were an estimated 67,240 contracts traded on Monday, which compares with Friday when 35,095 contracts traded. Spreading accounted for 38,474 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Monday as poor demand coupled with relatively favourable Midwestern crop weather weighed on prices.

Export demand is thought to be shifting to South America, with weakness in the Brazilian real relative to the United States dollar making newly harvested Brazilian beans even more attractive to global buyers.

U.S. farmers were expected to have made good seeding progress over the past week, with improved moisture conditions beneficial for crop development.

Weekly U.S. soybean export inspections of about 350,000 tonnes were up 57 per cent from the previous week, although year-to-date shipments of 40.3 million tonnes were still 17 per cent off last year’s pace.

CORN was pressured lower by the losses in soybeans and a downturn in wheat.

Weekly U.S. corn exports of about 1.4 million tonnes were up on the week, with year-to-date shipments at 37.7 million tonnes running 26 per cent off last year’s pace.

Only about 10 per cent of the U.S. corn crop remains to be seeded. Monday’s weekly progress report out after the close will include the first condition ratings for U.S. corn this growing season.

Harvest operations are just getting underway for Brazil’s second corn crop, although adverse weather earlier in the year cut into production prospects.

WHEAT was lower, retreating from overnight gains on ideas the Russian production worries may be priced into the futures for the time being.

Russian officials warned that the country could declare a nationwide emergency due to the damage caused to crops in May.

Weekly U.S. wheat exports came in at about 416,000 tonnes in the final full week of the wheat marketing year. Total U.S. wheat export inspections in 2023/23 of 18.7 million tonnes were down five per cent on the year.

Australia’s wheat crop was pegged at 29.1 million tonnes by ABARES, up by 700,000 tonnes from an earlier estimate.