Canola gains $2.70 on the week, USDA releases 2015 outlooks

It was a mostly down day on North American crop futures markets on Friday with traders taking profits after gains earlier in the week.

Canola closed slightly lower with March down $3.40 at $470.10 per tonne. May closed at $466.10, down $1.80.

Over the week, March rose $2.70 a tonne or 0.6 percent.

The May contract rose $3.

Weakness in canola today was tied to lower soy oil values.

U.S. soy oil production has increased recently as crushers increase their processing to get more soy meal, which is in good demand. The result is a surplus of soy oil.

Today soybeans fell on profit taking even though weekly export sales, at 621,000, tonnes were stronger than expected. Soy meal exports also topped expectations.

Palm oil was under pressure as trade slackened because of the Chinese New Year.

For the week, CBOT March soybeans rose 0.9 percent, the contract’s third straight week of gains.

March soymeal rose 4.5 percent. March soyoil dropped 2.8 percent.

Wheat fell with Chicago wheat dropping more than three percent while Minneapolis was down 1.3 percent.

Worries about U.S. export sales are pressuring wheat markets.

Weekly export sales were near the low end of the range of expectations.

Earlier this week Egypt cancelled plans to buy U.S. wheat, retendering because it expected it could get the supply cheaper elsewhere. It did business with France and Romania.

Morocco said it bought about 363,000 tonnes of soft wheat from the European Union.

For the week, the March CBOT soft red winter wheat contract dropped 4.3 percent.

MGEX spring wheat was 3.5 percent lower and K.C. hard red winter wheat shed 5.4 percent.

Corn futures also fell Friday on profit taking although weekly export sales also topped expectations.

The expiration of March options played a role in today’s lower close.

March corn was almost unchanged on the week and has been trading in a narrow 10 cent a bushel range through February.

The negotiations continue to try to resolve the port labour dispute on the U.S. West Coast. It is mainly affecting container traffic.

The USDA annual outlook conference continued today.

USDA surprised the market with a soybean seeded acreage forecast that was well below the outlooks of private analysts.

USDA sees soybean area at 83.5 million acres, down slightly from last year. Private analysts expect an increase of three to seven million acres.

USDA expects yields will be down slightly from last year’s high level, resulting in production of 3.8 billion bushels, down four percent from the current crop year.

However, the carry in to the new crop year will be very large at 385 million bu., putting the total supply at about 4.2 billion bu. up three percent from the current crop year.

USDA expects modest increases in domestic use and exports resulting in total demand increase of two percent.

The result is a 2015-16 ending stocks forecast of 430 million bu., an increase of 12 percent over the estimate for the current year.

That would be the highest since 2006-07

The 2015-16 stocks-to-use ratio increases to 11.4 percent from 10.4 at the end of the current crop year and 2.6 percent at the end of 2013-14.

USDA sees the season average soybean price dropping to $9 a bu. from $10.20 in the current crop year.

USDA sees soy oil stocks growing 44 percent by the end of 2015-16, with the average price dropping to 30 cents a pound, down from 32 cents.

That would be negative for canola.

USDA sees 2015-16 corn seeded area slipping to 89 million acres. Yield would also be down a little from last year’s record resulting in production of 13.595 billion bu. down four percent.

Total supply though is expected to be 15.447 billion bu., almost the same as the current year because of the large carry in stocks.

Total use is expected to grow 0.8 percent to 13.76 billion bu.

Year end stocks are expected to drop to 1.687 billion, down eight percent. However, the year average price is expected to decline to $3.50 a bu. from $3.65 this year.

Total wheat area is expected to fall to 55.5 million acres, due to the decline in the already seeded winter wheat crop. Spring wheat acres, including durum, will likely increase.

Yield is expected to increase, leading to total production of 2.125 billion bu., up five percent.

Total supply is expected to be up 6.9 percent at 2.967 billion bu.

Total use is expected to rise 5.8 percent to 2.204 billion bu.

Ending stocks are expected to rise 10.3 percent to 763 million bu.

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The year’s average price is expected to fall to $5.10 a bu. from $6 in the current year.

Euro zone finance ministers agreed in principle on Friday to extend heavily indebted Greece’s financial rescue by four months, averting a potential cash crunch in March that could have forced the country out of the currency area.

Light crude oil nearby futures in New York were down 82 cents to US$50.34 per barrel.

The Canadian dollar at noon was 79.96 cents, down from US80.09 cents the previous trading day. The U.S. dollar at noon was C$1.2506.

Canadian retail sales in December dropped by the most in four years, with weak holiday shopping and cheaper oil accounting for the surprise two percent drop.

In unofficial tallies –

The Toronto Stock Exchange’s S&P/TSX composite index closed down 8.09 points, or 0.05 percent, at 15,172.24.

The Dow and S&P 500 ended at record highs on Friday and the Nasdaq notched an eighth straight day of gains.

The Dow Jones industrial average rose 154.67 points, or 0.86 percent, to 18,140.44, the S&P 500 gained 12.85 points, or 0.61 percent, to 2,110.3 and the Nasdaq Composite added 31.27 points, or 0.63 percent, to 4,955.97.

For the week the TSX composite fell 0.6 percent, the Dow rose 0.7 percent, the S&P 500 was up 0.6 percent and the Nasdaq was up 1.3 percent

 

Winnipeg ICE Futures Canada dollars per tonne

Canola Mar 2015      470.10     -3.40       -0.72%

Canola May 2015     466.10     -1.80       -0.38%

Canola Jul 2015       459.90     -2.30       -0.50%

Canola Nov 2015     448.60     -2.50       -0.55%

Canola Jan 2016      450.20     -2.50       -0.55%

 

Milling Wheat Mar 2015    221.00     -3.00       -1.34%

Milling Wheat May 2015    230.00     -3.00       -1.29%

Milling Wheat Jul 2015     232.00     -3.00       -1.28%

 

Durum Wheat Mar 2015   333.00     unch 0.00%

Durum Wheat May 2015   323.00     unch 0.00%

Durum Wheat Jul 2015     313.00     unch 0.00%

 

Barley Mar 2015      184.00     unch 0.00%

Barley May 2015      186.00     unch 0.00%

Barley Jul 2015       188.00     unch 0.00%

 

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

 

Chicago

Soybeans Mar 2015 999.25     -8    -0.79%

Soybeans May 2015 1002.25   -9    -0.89%

Soybeans Jul 2015   1006.75   -8.25       -0.81%

Soybeans Aug 2015 1005.75   -8    -0.79%

Soybeans Sep 2015 991.25     -7    -0.70%

Soybeans Nov 2015 980  -6.25       -0.63%

 

Soybean Meal Mar 2015   347.5      unch 0.00%

Soybean Meal May 2015  338.7      -1    -0.29%

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Soybean Meal Jul 2015    335.6      -0.4  -0.12%

 

Soybean Oil Mar 2015      31.48      -0.35       -1.10%

Soybean Oil May 2015     31.67      -0.37       -1.15%

Soybean Oil Jul 2015       31.86      -0.36       -1.12%

 

Corn Mar 2015 385.25     -4.5  -1.15%

Corn May 2015 393  -4.75       -1.19%

Corn Jul 2015  400.5      -4.75       -1.17%

Corn Sep 2015 407.5      -4.5  -1.09%

Corn Dec 2015 416.25     -3.5  -0.83%

 

Oats Mar 2015 273.5      -3.5  -1.26%

Oats May 2015 273.5      -0.5  -0.18%

Oats Jul 2015  276.75     +0.25      +0.09%

Oats Sep 2015 283.5      +2    +0.71%

Oats Dec 2015 285.75     +0.75      +0.26%

 

Wheat Mar 2015      510.25     -17.5       -3.32%

Wheat May 2015     507  -12.5       -2.41%

Wheat Jul 2015       511.5      -10.25     -1.96%

Wheat Sep 2015      519.75     -10   -1.89%

Wheat Dec 2015     531.75     -10.25     -1.89%

 

Minneapolis

Spring Wheat Mar 2015   566.75     -7.25       -1.26%

Spring Wheat May 2015   567  -7.5  -1.31%

Spring Wheat Jul 2015     571.75     -6.5  -1.12%

Spring Wheat Sep 2015   577.75     -6.25       -1.07%

Spring Wheat Dec 2015   589.25     -5.25       -0.88%

 

Kansas City

Hard Red Wheat Mar 2015       533.25     -11.25     -2.07%

Hard Red Wheat May 2015      538.25     -7.25       -1.33%

Hard Red Wheat Jul 2015 545.75     -6    -1.09%

Hard Red Wheat Sep 2015      558  -5.5  -0.98%

Hard Red Wheat Dec 2015      572.5      -5.25       -0.91%

 

 

 

 

 

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