North American grain/oilseed review: Canola falls sharply lower

By Phil Franz-Warkentin

Glacier FarmMedia | MarketsFarm — The ICE Futures canola market was sharply lower on Thursday, as a heavy selloff in Chicago soybeans and soyoil weighed on values.

Soyoil was down its daily limit amid talk that proposed biofuel blending targets submitted by the U.S. Environmental Protection Agency were considerably less than what the industry had hoped for.

Speculative selling contributed to the losses in canola, with some stops likely hit on the way down. The July contract fell below support at both C$720 and C$700 per tonne.

However, tight supplies and the need to ration demand remained supportive.

There were 48,722 contracts traded on Thursday, which compares with Wednesday when 60,183 contracts changed hands. Spreading accounted for 18,874 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Thursday, retreating from the 10-month highs hit Wednesday as the market reacted to rumours that official targets for renewable diesel usage in the United States may come in well below what the industry had lobbied for.

While an alliance of oil and biofuel producers had called for a biodiesel blending target of 5.25 billion gallons, the proposed level submitted by the Environmental Protection Agency was rumoured to be much smaller than that at 4.65 billion gallons.

However, other proposed amendments to U.S. biofuel policies announced earlier in the week that would see the 45Z clean fuel production biofuel tax credit extended through 2031 remained somewhat supportive.

The National Oilseed Processors Association reported that 190.226 million bushels of soybeans were crushed in the U.S. in April. That was down 2.2 per cent from March but still beat expectations and marked the highest total on record for the month of April.

CORN was mixed, with a firmer tone in the nearby July contract and losses in the more deferred positions. The good U.S. weather and seeding progress weighed on the new crop months.

Weekly U.S. corn export sales of 1.677 million tonnes were at the high end of trade estimates.

WHEAT futures in the U.S. were higher across the board on Thursday, underpinned by solid export demand.

The U.S. Department of Agriculture reported weekly wheat export sales of 804,800 tonnes, which were at the higher end of pre-report trade guesses.

A crop tour of Kansas was showing above average yields across much of the state, limiting the upside in the futures.