Big crops hammer canola prices down $19.60 on week

The boot finally dropped on canola today with the January contract falling $10 per tonne after technical support was breached, triggering sell stops on the way down.

Nearby canola closed down two percent while soybeans fell only 0.19 percent and soy oil was down 0.25 percent.

Canola had held up remarkably well following the Statistics Canada report on Wednesday that pegged the canola crop at a record shattering 18 million tonnes.

The price had dipped below $480 a few times since the report but had been bouncing back up, but the bulls faded away today and the negative momentum increased.

On the week, January canola fell $19.60 per tonne.

But the drop increases canola’s attractiveness relative to other oilseeds and should encourage exports and crush.

Indeed this past week’s crush was up. The Canadian Oilseed Processors Association said members crushed 148,122 tonnes in the week ending Dec. 4, up about six percent from the week before. That was almost 85 percent of the crush capacity. Last year at the same time the capacity use was 88.3 percent.

On the week, January canola fell almost four percent while soybeans fell one percent.

Remember, canola is a relatively small crop in the oilseed complex and its long term trend will be strongly influenced by soybeans. The prospect for record large South American soybean crops are weighing down oilseeds generally, but on the other hand, U.S. soybean exports and domestic use have been better than expected, leading to thoughts that year end U.S. soybean stocks might wind up lower than what USDA now forecasts. But weekly U.S. soybean export sales were a little slower the past two weeks, creating unease that maybe China will shift more buying to South American sources.

Spring wheat futures were again under pressure from the record large Canadian crop in the StatsCan report and Thursday’s U.S. wheat export sales report that had a lower than expected number.

However, Kansas hard red winter wheat edged a fraction of a penny higher on worries that the icy winter blast hitting the U.S. plains could lead to winter kill of some winter wheat fields that do not get a protective blanket of snow before the cold and freezing rain hit.

Corn today turned firm on a late bout of short covering but gains were checked by a plentiful U.S. harvest.

Negotiators today made a breakthrough at the World Trade Organization talks aimed at getting a new world trade deal. Read more about the breakthrough at Producer.com. Our reporter Barry Wilson is the only Canadian agriculture reporter at the meeting.

The International Grains Council today forecast that 2014 wheat acreage will rise 1.4 percent but with a return to average yields after this year’s exceptional production, overall production tonnage should fall by 1.6 percent.

 

Winnipeg ICE Futures Canada dollars per tonne

Canola Jan 2014       471.90       -9.10       -1.89%

Canola Mar 2014       481.80       -9.30       -1.89%

Canola May 2014       491.00       -9.70       -1.94%

Canola Jul 2014       498.40       -9.40       -1.85%

Canola Nov 2014       509.10       -9.50       -1.83%

 

Milling Wheat Dec 2013       203.00       -1.00       -0.49%

Milling Wheat Mar 2014       215.00       -1.00       -0.46%

Milling Wheat May 2014       228.00       -1.00       -0.44%

 

Durum Wheat Dec 2013       245.00       unch       0.00%

Durum Wheat Mar 2014       251.00       unch       0.00%

Durum Wheat May 2014       255.00      unch      0.00%

 

Barley Dec 2013       152.00       unch       0.00%

Barley Mar 2014       154.00       unch       0.00%

Barley May 2014       155.00       unch       0.00%

 

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

 

Chicago

Soybeans Jan 2014       1325.5       -2.5       -0.19%

Soybeans Mar 2014       1310.5       -1.25       -0.10%

Soybeans May 2014       1296.5       -0.75       -0.06%

Soybeans Jul 2014       1287.75       -2       -0.16%

Soybeans Aug 2014       1258.5       -0.25       -0.02%

Soybeans Sep 2014       1201.5       +0.75       +0.06%

 

Soybean Meal Dec 2013       447.3       +1.2       +0.27%

Soybean Meal Jan 2014       427.4       -0.7       -0.16%

Soybean Meal Mar 2014       419.1       +0.6       +0.14%

 

Soybean Oil Dec 2013       40.28       -0.1       -0.25%

Soybean Oil Jan 2014       40.49       -0.12       -0.30%

Soybean Oil Mar 2014       40.89       -0.13       -0.32%

 

Corn Dec 2013       424       +1.25       +0.30%

Corn Mar 2014       434.25       +0.75       +0.17%

Corn May 2014       442.75       +0.75       +0.17%

Corn Jul 2014       449.75       +0.75       +0.17%

Corn Sep 2014       456       +1       +0.22%

 

Oats Dec 2013       366       +1.75       +0.48%

Oats Mar 2014       328       +2.25       +0.69%

Oats May 2014       316.5       +1.5       +0.48%

Oats Jul 2014       316       +0.75       +0.24%

Oats Sep 2014       322.5       +0.75       +0.23%

 

Wheat Dec 2013       637.25       -0.75       -0.12%

Wheat Mar 2014       651       -1       -0.15%

Wheat May 2014       656.5       -0.5       -0.08%

Wheat Jul 2014       654       unch       0.00%

Wheat Sep 2014       662.25       +0.5       +0.08%

 

Minneapolis

Spring Wheat Dec 2013       663       -3.25       -0.49%

Spring Wheat Mar 2014       681       -3.25       -0.47%

Spring Wheat May 2014       690.75       -2.5       -0.36%

Spring Wheat Jul 2014       698.25       -1.75       -0.25%

Spring Wheat Sep 2014       705.5       -1       -0.14%

 

Kansas City

KCBT Red Wheat Dec 2013       705.25       +0.25       +0.04%

KCBT Red Wheat Mar 2014       695.5       +0.25       +0.04%

KCBT Red Wheat May 2014       696.25       +1.25       +0.18%

KCBT Red Wheat Jul 2014       688.5       +0.5       +0.07%

KCBT Red Wheat Sep 2014       698.5       +2.25       +0.32%

 

Light crude oil nearby futures in New York rose 27 cents at $97.65 US per barrel.

The Canadian dollar at noon was 93.78 cents US, down from 94.00 cents the previous trading day. The U.S. dollar at noon was $1.0663 Cdn.

Two reports, one yesterday and one today, show the U.S. economy finally picking up speed. Today the U.S. government said unemployment fell more than expected in November, dropping to seven percent, a five year low. Yesterday, it said US gross domestic product jumped to 3.6 percent in the third quarter, up from predictions of about 3.1 percent second quarter growth of 2.5 percent.

The enthusiasm was tempered by the fact that a fair amount of the GDP increase was from rising business inventories. Those inventories will have to be sold this quarter to maintain the rosy outlook. If they are not sold, it could dampen the outlook.

Late in the session, the TSX composite was up 79.93 or 0.61 percent at 13,280.33.

The Dow Jones was up a little more than one percent.

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