North American Grain/Oilseed Review: Canola rises, grains bearish after USDA report

Glacier FarmMedia MarketsFarm — The ICE Futures canola market rallied to close higher after earlier losses on Wednesday as agricultural markets reacted to the latest supply/demand estimates from the United States Department of Agriculture.

While the USDA numbers included only a few changes, soyoil futures settled with small gains and soybeans showed some recovery after hitting nearby lows. Crude oil and Malaysian palm oil were both higher, while European rapeseed was down.

Unsettled weather is forecast to continue in the Prairies over the next five days. North and central regions could see between 25 to 75 millimetres of rain, while southern parts could see 10 to 25 mm.

At mid-afternoon, the Canadian dollar was up three-tenths of a U.S. cent compared to Tuesday’s close. The U.S. Federal Reserve announced today it will keep its key interest rate steady.

There were 78,233 canola contracts traded on Wednesday, which compares with Tuesday when 59,208 contracts changed hands. Spreading accounted for 54,608 of the contracts traded.

The United States Department of Agriculture (USDA) released its monthly World Agricultural Supply/Demand Estimates (WASDE) on Wednesday, albeit with few changes compared to last month.

The July contracts for all three major U.S. WHEAT varieties went back to the red on Wednesday after receiving some respite on Tuesday. The Minneapolis spring wheat contract hit its lowest level since late April while the Kansas City hard red wheat contract dropped to its lowest point since last month.

Projected U.S. wheat ending stocks were unchanged for old crop at 688 million bushels, in line with the trade, while those for new crop declined by eight million at 758 million, below trade expectations. U.S. wheat production was up 17 million bushels at 1.875 billion.

World ending stocks were slated to increase by 1.76 million tonnes for old crop at 259.56 million, while new crop declined 1.34 million tonnes at 252.27 million, both above trade expectations.

FranceAgriMer projected old crop soft wheat exports at 16.38 million tonnes, up 80,000 from last month. Exports outside the European Union would increase, while those inside the bloc would decrease.

Japan is tendering more than 109,000 tonnes of wheat with more than half coming from the U.S. and the rest from Canada and Australia.

Egypt purchased 400,000 tonnes from Romania, Ukraine and Bulgaria combined on Tuesday.

July CORN alternated between gains and losses for the fifth consecutive day, moving upwards by a few cents per bushel. The contract has stayed within US$4.40 and US$4.60/bu. over the past four sessions.

The USDA left projected U.S. old crop and new crop ending stocks steady at 2.022 billion bushels and 2.102 billion bushels, respectively, both above trade estimates.

Brazilian corn production was also left unchanged at 122 million tonnes for old crop and 127 million for new crop. Argentina’s were also unchanged at 53 million for old crop and 51 million for new.

World ending stocks declined to 312.39 million tonnes for old crop and 310.77 million for new crop.

FranceAgriMer estimated the country’s old crop corn ending stocks at 2.24 million tonnes, down 30,000 from last month but up 35 per cent from last year.

The Ukrainian Grain Association projected corn production to fall 4.1 million tonnes at 25.5 million, while exports would drop 5.5 million tonnes at 20.5 million.

July soybeans traded to both sides of unchanged on Wednesday, closing within a cent lower. Deferred contracts had losses at around four to five cents.

Projected ending stocks for both old and new crop U.S. soybeans were increased by 10 million bushels from last month at 350 million for old crop and 455 million for new. The figures were above trade estimates.

Projected old crop Brazilian soybean production was down one million tonnes at 153 million, while Argentina’s was steady at 50 million. New crop estimates were unchanged at 169 million for Brazil and 51 million for Argentina.

World ending stocks were 111.07 million tonnes for old crop and 127.9 million for new.

So far, 20.2 million tonnes or 40.7 per cent of Argentina’s soybean crop has already been sold. As of June 5, 94 per cent of the crop has been harvested.