U.S. Department of Agriculture’s forecasts for year end 2015-16 and 2016-17 soybean stocks were smaller than the trade expected, helping to lift the July contract by 5.6 percent to the highest point in 18 months.
The rally helped lift July canola by $16.20 per tonne or 3.14 percent to close at $532.30.
Rain continued to fall over a good part of Saskatchewan and central Manitoba, with areas near Saskatoon getting some of the heaviest accumulations today judging by Environment Canada radar.
The rain is expected to shift gradually eastward and taper off by Thursday
The big market news today was the USDA monthly supply and demand report, which was the first report this year to forecast 2016-17 production.
The report was bullish soybeans and bearish wheat, with corn in between. But wheat still managed a small gain, carried higher by the general exuberance.
USDA expects old crop year-end U.S. soybeans to fall to 400 million bushels, shy of analyst expectations of 426 million.
But the bigger news was the forecast for U.S. 2016-17 ending stocks at 305 million bu., below an average of trade estimates for 405 million.
“The new-crop beans number is the one that stands out the most. Coming out 100 million bushels below the average trade guess is a big miss, no matter how you slice it,” said Jim Gerlach, president of A/C Trading, speaking to Reuters.
The USDA attributed its figure to rising export demand for U.S. soy and reduced stocks in South America this autumn following floods in Argentina.
USDA pegged global 2015-16 soybean stocks at 74.25 million tonnes, below the trade’s forecasts of 76.28. USDA’s global soy year-end for 2016-17 was 68.21 million tonnes, well below the trade’s guess of 73.23 million.
The soybean numbers could get smaller.
The USDA pegged Argentine soybean production at 56.5 million tonnes, down 3.5 million tonnes from its April outlook. Brazil soy production was lowered to 99 million tonnes from 100 million tonnes.
But reports from Argentina and Brazil indicate that crops there might be smaller than the latest USDA forecasts.
The USDA pegged U.S. corn year-end stocks at levels a little less than what the trade expected but corn stocks are still expected to rise to 2.153 billion bu. by the end of 2016-17, up from 1.803 at the end of the current crop year.
“Yes, new-crop carry-out came in about 140 billion bu. below the average trade guess. But it’s almost 2.2 billion bu., and you can’t call that bullish,” Gerlach said.
Wheat was the loser in the report. USDA’s ending stocks forecast for the current crop year was close to expectations but it sees 2016-17 U.S. stocks growing to 1.029 billion bu., topping analysts’ expectation for 0.997 billion.
USDA estimated the 2016-17 U.S. winter wheat crop at an unexpectedly big 1.427 billion bu., based on an average yield of 47.8 bu. per acre. If realized, that would match the record average yield set in 1999.
It sees global year end wheat stocks in 2016-17 rising to 257.34 million tonnes, topping the trade’s guess of 242.98 million and the current year’s 242.91 million.
However, China accounts for almost all the increase in the year-end stocks with its stores rising to an estimated 118 million tonnes from 96.3 million at the end of the current crop year.
Light crude oil nearby futures in New York were up $1.22 to US$44.66 per barrel.
The Canadian dollar at noon was US77.17 cents, up from 76.96 cents the previous trading day. The U.S. dollar at noon was C$1.2959.
Major North American stock indexes were up more than one percent in late trade, lifted by stronger oil prices and a rally in Amazon.
Winnipeg ICE Futures Canada dollars per tonne
Canola May 2016 526.90 +15.80 +3.09%
Canola Jul 2016 532.30 +16.20 +3.14%
Canola Nov 2016 521.70 +14.60 +2.88%
Canola Jan 2017 523.60 +15.10 +2.97%
Canola Mar 2017 523.50 +15.00 +2.95%
Milling Wheat May 2016 242.00 +4.00 +1.68%
Milling Wheat Jul 2016 240.00 +4.00 +1.69%
Milling Wheat Oct 2016 236.00 +3.00 +1.29%
Durum Wheat May 2016 300.00 unch 0.00%
Durum Wheat Jul 2016 295.00 unch 0.00%
Durum Wheat Oct 2016 289.00 unch 0.00%
Barley May 2016 172.00 unch 0.00%
Barley Jul 2016 174.00 unch 0.00%
Barley Oct 2016 174.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans May 2016 1076 +57.25 +5.62%
Soybeans Jul 2016 1084 +57.5 +5.60%
Soybeans Aug 2016 1085.5 +56.75 +5.52%
Soybeans Sep 2016 1075 +54.5 +5.34%
Soybeans Nov 2016 1067.5 +51.75 +5.09%
Soybeans Jan 2017 1064.5 +47.5 +4.67%
Soybean Meal May 2016 360.4 +20.2 +5.94%
Soybean Meal Jul 2016 359.7 +20 +5.89%
Soybean Meal Aug 2016 358.3 +20 +5.91%
Soybean Oil May 2016 33.13 +0.59 +1.81%
Soybean Oil Jul 2016 33.44 +0.61 +1.86%
Soybean Oil Aug 2016 33.55 +0.6 +1.82%
Corn May 2016 378.5 +10.75 +2.92%
Corn Jul 2016 381 +12 +3.25%
Corn Sep 2016 382.75 +11.75 +3.17%
Corn Dec 2016 387.75 +10.75 +2.85%
Corn Mar 2017 396.75 +10.25 +2.65%
Oats May 2016 181.25 +4 +2.26%
Oats Jul 2016 192 +2.5 +1.32%
Oats Sep 2016 203.5 +2.5 +1.24%
Oats Dec 2016 216.5 +3.5 +1.64%
Oats Mar 2017 225.25 +3.25 +1.46%
Wheat May 2016 451.5 +4.5 +1.01%
Wheat Jul 2016 461.25 +4.75 +1.04%
Wheat Sep 2016 472 +4.75 +1.02%
Wheat Dec 2016 490.5 +4.75 +0.98%
Wheat Mar 2017 508.25 +5 +0.99%
Minneapolis
Spring Wheat May 2016 529 unch 0.00%
Spring Wheat Jul 2016 533.75 +3.5 +0.66%
Spring Wheat Sep 2016 541.5 +3.75 +0.70%
Spring Wheat Dec 2016 553.25 +3.25 +0.59%
Spring Wheat Mar 2017 562.25 +2.25 +0.40%
Kansas City
Hard Red Wheat May 2016 436.75 +3 +0.69%
Hard Red Wheat Jul 2016 448.25 +2 +0.45%
Hard Red Wheat Sep 2016 465.5 +2 +0.43%
Hard Red Wheat Dec 2016 490 +2 +0.41%
Hard Red Wheat Mar 2017 506.25 +2 +0.40%
