North American Grains/Oilseed Review – Canola dips in wake of USDA report

By Dave Sims, Commodity News Service Canada

Winnipeg, September 12 – The ICE Futures Canada canola market ended lower on Tuesday, weighed down by a bearish USDA report that pegged this year’s soybean harvest at a record level.

In today’s supply and demand report, the USDA forecast the US soybean crop at a record 4.43 billion bushels. It also put the yield at a higher-than-expected 49.9 bushels an acre. This caused a sharp drop in the US soy complex, which in turn dragged down canola.

Funds have moved from long positions to shorts, which weighed on values. Harvest pressure was also a feature.

However, on the other side of the market, weakness in the Canadian dollar helped to lessen the damage. Canola is typically more attractive to international buyers when the Canadian dollar drops against its US counterpart.

Rain is expected to fall on parts of the Prairies later this week, which was supportive.

Demand for global oilseeds remains steady.

Around 29,633 canola contracts were traded on Tuesday, which compares with Monday when around 22,850 contracts changed hands. Spreading accounted for 17,616 of the contracts traded.

Milling wheat, barley and durum were all untraded.

Settlement prices are in Canadian dollars per metric tonne.

Soybeans ended eight to nine cents lower on Tuesday as the USDA projected a record harvest in its monthly supply and demand report.

The agency forecast the US soybean harvest at a record 4.43 billion bushels. It also put the yield at a higher-than-expected 49.9 bushels an acre.

Soybean inventories are also expected to hit 475 million bushels, which was above traders’ expectations.

The Chicago corn market was also pressured by the report, falling five to six cents a bushel.

The USDA predicted this year’s corn harvest to reap 14.18 billion bushels of corn, which would be the third largest crop on record.

The agency also put the yield at 169.9 bushels an acre, which exceeded the August forecast.

In yesterday’s crop condition report, the USDA left the condition rating unchanged from the week before.

Wheat futures on the Chicago Board of Trade finished six to seven cents higher.

The 2017/18 wheat estimates were mostly unchanged from the last report, which some traders may have viewed as supportive.

The agency did decrease its estimate for world wheat inventories by a small amount. According to the USDA, stockpiles will be 263 million tonnes, which was 1.5 million less than the previous estimate.

Wheat production in Australia and the European Union is not expected to be as high as previously forecast, which was supportive.

Commodity Future Prices

Canola
updated 1970-01-01 00:00
Price Change
MonthLatChange
Nov484.40-1.30
Jan491.30-1.30
Mar498.00-1.50

Prices are in Canadian dollars per metric ton

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