Canola edges higher Wednesday catching up with recent soybean gains

Canola closed slightly higher on Wednesday but down from the day’s highs, on ideas that canola had become undervalued compared to recent gains in soybeans.

Crop futures did better than other commodities that were pushed down by worries over lack of progress in addressing the looming U.S. fiscal cliff.

January canola closed at $592.90, up 90 cents.

Wheat continued to be supported by worries over drought in the U.S. hard red spring wheat zone and thoughts that demand will soon turn to North America and Europe as Black Sea stocks are used up.

Market analysts at AgriTrend Farm Forum in Saskatoon were generally bullish.

Here are some of the points speakers covered.

World stocks of oilseeds and corn are very tight and wheat stocks are not a burden.

The market had been pricing in perfect South American growing conditions for corn and soybeans but now excess moisture in parts of Argentina and dry soil in southern Brazil are stressing crops early in the growing season.

Supply of exportable wheat from the Black Sea is winding down, as is supply of soybeans and soy oil from last season’s South American oilseed crop.

There will be huge demand for South American soybeans once its harvest is ready in the first quarter of 2013, but its transportation infrastructure will be heavily taxed to move it all. Some buyers are hedging their bets and seeking American product.

A limiting factor in the vegetable oil complex is the huge stocks of cheap palm oil.

Hog futures hit a six month high on strong cash demand, good  packer margins and tightening hog supply. Catle fell on worries about the fiscal cliff.

 

Winnipeg (per tonne)

Canola Jan 13  $592.90, up $0.90       +0.15%

Canola Mar 13  $592.60, up $1.20       +0.20%

Canola May 13  $591.20, up $0.50       +0.08%

Canola Jul 13  $587.70, down $0.30       -0.05%

 

Milling Wheat Dec 12  $308.00, up $5.60       +1.85%

Milling Wheat Mar 13  $316.00, up $5.60       +1.80%

Milling Wheat May 13  $319.00, up $5.60       +1.79%

 

Durum Wheat Dec 12  $312.00, unchanged

Durum Wheat Mar 13  $316.00, unchanged

Durum Wheat May 13  $320.00, unchanged

 

Barley Dec 12  $245.00, unchanged

Barley Mar 13  $248.00, unchanged

Barley May 13  $249.00, unchanged

 

Chicago (per bushel)

Soybeans (P) Jan 13  $14.4625, down 3.0 cents       -0.21%

Soybeans (P) Mar 13  $14.35, down 2.5       -0.17%

Soybeans (P) May 13  $14.105, down 3.75       -0.27%

Soybeans (P) Jul 13  $14.0175, down 5.25       -0.37%

 

Corn (P) Dec 12  $7.6025, up 0.25       +0.03%

Corn (P) Mar 13  $7.64, unchanged

Corn (P) May 13  $7.62, up 0.5       +0.07%

 

Oats (P) Dec 12  $3.7075, down 2.25       -0.60%

Oats (P) Mar 13  $3.8725, down 2.25       -0.58%

Oats (P) May 13  $3.90, down 2.25       -0.57%

 

Minneapolis (per bushel)

Spring Wheat Dec 12  $9.3875, up 2.5 cents       +0.27%

Spring Wheat Mar 13  $9.5275, up 2.25       +0.24%

Spring Wheat May 13  $9.61, up 2.5       +0.26%

Spring Wheat Jul 13  $9.6225, up 2.0       +0.21%

 

The Bank of Canada noon rate for the loonie was $1.0072 up from $1.0064 the day before.

The U.S. buck as 99.29 cents Cdn.

Nearby light crude oil in New York was down 69 cents at $86.49.

Equity markets gained after comments from House Speaker John Boehner, the top Republican in Congress, indicated compromise was possible to avoid the “fiscal cliff.”

The Toronto Stock Exchange’s S&P/TSX composite index rose 28.70 points, or 0.24 percent, to close at 12,140.33.

The Dow Jones industrial average rose 106.98 points, or 0.83 percent, to 12,985.11 at the close.

The S&P 500 added 10.99 points, or 0.79 percent, to close at 1,409.93. The Nasdaq Composite gained 23.99 points, or 0.81 percent, to close at 2,991.78.