The row crops were lower while wheat futures at Chicago found some support, was it a case of sell row crops buy wheat, possibly. Fundamental strength in wheat remains flat to softer while the row crops in the US continue to enjoy a relatively soft season to date.
Both ICE Canadian canola futures and Paris rapeseed futures followed Chicago soybean futures lower.
The stronger AUD could have a larger impact on local canola values than the underlying futures market today. In Aussie dollar terms the fall in ICE canola futures is worth about AUD$0.63 per tonne while the move in the AUD is worth closer to AUD$4.65 / tonne.
EU feed wheat and milling wheat values trended lower, following the lead from the US markets on Monday. Going forward we should see continued support for the oilseed sector with crush margins supporting canola values.
The AUD will continue to play a major role but we also have very strong basis. Shortages in palm oil supply continues to be a major driver in oilseed values. Some models predict a shortfall of 10-25% over current palm oil prediction due to labour issues associated with COVID19.
Looking at the futures market one can determine that the demand for oilseeds in nearby and storing oilseeds into the new year may not prove wise as the futures values do show a discount into the later 2021 contracts. Forward contracting of oilseeds at current values will also lock in the historically high basis we are seeing.
The cash market for canola in SW Saskatchewan was also sharply lower, much more so than the futures market. The December pickup slot saw bids fall on average around C$3.36 / tonne. Cash bids for durum were also sharply lower, falling C$15.69 for the outer months.