North American Grain/Oilseed Review: Canola strengthens, soybeans drop

Glacier FarmMedia MarketsFarm — The ICE Futures canola market was higher on Thursday despite mixed comparable oils.

European rapeseed and Malaysian palm oil made gains. However, Chicago soyoil was down and crude oil was lower as the trade weighed an upcoming meeting of OPEC+ and speculation over cuts to key interest rates in the United States.

Spreads between Canadian canola and European rapeseed are creating incentive towards canola exports into Europe, according to one analyst. So far this marketing year, Canadian canola exports have lagged compared to the year prior.

At mid-afternoon, the Canadian dollar was down three-tenths of a U.S. cent compared to Wednesday’s close.

There were 34,351 canola contracts traded on Thursday, which compares with Wednesday when 40,863 contracts changed hands. Spreading accounted for 14,732 of the contracts traded.

CORN futures at the Chicago Board of Trade (CBOT) on Thursday received some support from adverse weather in the United States Midwest for their third positive session in four days.

The U.S. Department of Agriculture (USDA) reported 911,200 tonnes of old crop U.S. corn were sold for export during the week ended May 16, up 23 per cent from the previous week. In addition, 305,000 tonnes of new crop corn were also sold, mostly to Mexico.

Canada imported 34,500 tonnes of U.S. corn during the week ended May 16, taking the crop year total to 925,500 tonnes, more than double from one year ago.

The International Grains Council (IGC) cut its forecast for worldwide new crop corn production by six million tonnes at 1.22 billion, largely due to a leafhopper outbreak in Argentina.

July contracts for all three major U.S. WHEAT varieties made gains. While the Chicago wheat contract exceeded US$7 per bushel again on Thursday, it closed below the mark.

Only 17,900 tonnes of old crop U.S. wheat were sold for export last week, down 77 per cent from the week before. Meanwhile, 224,900 tonnes of new crop wheat were also sold with more than half going to Mexico.

The IGC reduced its global new crop wheat production forecast by three million tonnes at 795 million, due to revised outlooks for Russia and Ukraine.

Germany’s association of farm co-operatives said wheat production in the country is expected to drop 5.6 per cent from last year at 20.31 million tonnes, although slightly higher than its previous forecast.

SOYBEAN prices reached their highest values since January, but could not hold onto its gains, closing lower and staying rangebound.

Old crop U.S. soybean export sales were near the lower end of trade expectations at 279,400 tonnes last week, while 65,500 tonnes of new crop soybeans were also sold.

Old crop soymeal sales were below trade expectations at 145,300 tonnes, but above expectations for new crop at 51,400 tonnes.

There were 1,000 tonnes of net sales reductions for old crop soyoil, while 4,000 tonnes of new crop were sold.

Iowa, Nebraska and parts of North Dakota and Minnesota were forecast to see up to 25 mm of rain through Saturday.

Freight operators reduced Brazilian soybean export projections for May by 300,000 tonnes at 13.83 million, four per cent less than the year before.