By Dave Sims, Commodity News Service Canada
Winnipeg, August 10 (CNS Canada) – Canola contracts on the ICE Futures platform ended lower Friday, as the size of the soybean crop in the United States is expected to be higher than previously thought.
According to the United States Department of Agriculture, U.S. soybean farmers are due for a record harvest. The agency pegged the crop in 2018/19 at 4.6 billion bushels, which compares to last year’s crop of 4.4 billion.
The news sent the entire U.S. soy complex plunging, which weighed on oilseed markets including canola.
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The damage might have been worse if it weren’t for a heatwave which has gripped much of Western Canada. Many parts of Saskatchewan and Alberta were expecting temperatures of 35 degrees Celsius or higher today.
Weakness in the Canadian dollar was supportive for values while the front-month November contract received technical strength at the C$500 per tonne mark.
About 13,831 canola contracts traded, which compares with Thursday when 11,285 contracts changed hands. Spreading accounted for 3,214 of the contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Soybean futures on the Chicago Board of Trade fell off the proverbial cliff on Friday as the United States Department of Agriculture forecast a massive soybean crop in the U.S.
The soybean yield in the U.S. is expected to hit a whopping 51.6 bushels an acre. That would put production at 4.6 billion bushels, which compares to most analysts’ estimates of 4.4 billion.
Global soybean stocks will also expand to 105.9 million tonnes, which compares to 95.6 million tonnes last season. Most analysts point to the recent imposition of tariffs on Chinese imports of U.S. soybeans as the main reason behind the swelling inventories.
The corn market suffered losses as the USDA pegged the 2018/19 crop harvest at 14.6 billion bushels, which exceeded most analysts’ expectations.
The agency also pegged yields at 178.4 bushels an acre, which is a new record.
Stockpiles were also a little larger than expected at 1.6 billion bushels. Last month the USDA pegged the number at just 1.5 billion bushels.
Chicago wheat futures ended lower in speculative selling, weighed down in part by spillover losses in corn and soybeans.
The USDA lowered its estimate for world wheat supplies in 2018/19 by seven million tonnes. Most of the downturn is tied to the drought problems in Europe, Australia and the Black Sea region.
The USDA pegged wheat stockpiles at the end of the 2018/19 marketing year at 935 million bushels. That is about 25 million bushels less than what analyst had predicted.
