An increase in the mandate for palm oil in Indonesian biodiesel from 35% to 40% is expected to tighten palm oil stocks there in the new year. This may have a knock on effect to vege oils in general, potentially helping to lift values in the mid term. The US soybean market and the Canadian canola market have a few other issues closer at hand to consider though.
The US will be focused on the planting progress of S.American soybeans. Brazil had been seeing some delays due to dry weather but that seems to be in the past now. Recent scattered falls across most of the growing regions now has summer crop sowing under way there. Wet weather in the SE of Brazil continues to create a few issues for both summer crop sowing and wheat harvest / quality.
Overnight Paris rapeseed futures were firmer, up €4.75 / tonne in the Feb slot. Chicago soybean futures were flat, up 2.5c/bu in the Jan25 slot, Winnipeg canola may of had a reality check and drifted C$1.70/t lower in the Jan 25 slot. XF cash bids for canola across SE Saskatchewan were mixed, generally flat to firmer by just a few cents per tonne for canola.
The big mover across the Canadian Prairies was durum, 1CWAD13 increased on average by C$8.51 / tonne XF SE Sask to C$319.06 / tonne for a January lift. On the back of an envelop we can work out what this would be worth landed Italy and then convert that number back to a rough XF LPP value. We come up with something close to $380 +/-, that’s very comparable to what French durum would work back to using the same theory. This also indicates there is good support at current values here, also leaving the trade some margin.
This may or may not be confirmed by trade assumptions on the Algerian durum tender just passed. It’s assumed by the trade that around 275kt of Canadian durum and 225kt of other origin durum has been booked by Algeria this week. No values as yet. This week we’ve seen increases in the Canadian durum value, Spanish values and French and Italian values. Algeria was also said to have picked up over 600kt of milling wheat, mostly Black Sea origin, this week.