Canola gains $4.30 on the week, dips Friday on technical weakness

Canola fell on Friday but gained a little on the week.

Canola faced pressure today from increased hedging activity.

January canola closed at $589.60, down 80 cents.

For the week, it gained $4.30.

The higher prices that followed the Statistics Canada report on Wednesday caused an uptick in farmer deliveries.

There was also technical pressure in canola and soybeans as prices failed to hold above important resistance levels.

We are also getting into the Goldman Roll period when funds roll out of the nearby contract and into the following month.

• U.S. traders are coming out with their forecasts for next Tuesday’s USDA report. An average of analysts’ forecasts polled by Reuters puts the year end soybean stocks number at 130 million bushels, down 10 million from USDA’s November report. Soybean exports are moving at a breakneck pace.

It is the opposite situation in corn where slow export sales should lead to an increase in year end stocks.

The Reuters survey of 20 analysts pegged corn ending stocks at 663 million bu., up from 647 million in the last report.

Wheat ending stocks were estimated at 712 million bu., up from 704 million last month.

• That was slightly bearish for wheat but other news was bullish.

The European Commission this week awarded its biggest volume of wheat export licences in more than two years at 712,000 tonnes.

Export licences now total eight million tonnes, up from 6.6 million at the same time last year, despite a smaller crop.

• A Reuters story quoting Mark Hodges, a wheat industry consultant and executive director of Plains Grains Inc, says if drought continues to stress the U.S. winter wheat crop, about 25 percent of seeded acreage could be abandoned. In the last USDA report on crop condition for the season, 26 percent of the winter wheat crop was listed in poor to very poor condition.

Abandonment reached 25 percent before only twice since the 1950s, in 1988-89 and 2001-02.

There is still a chance for rain to improve conditions but the situation this fall has been made worse by the fact that not only is it dry, it has also been unusually warm and the wheat is not preparing properly for dormancy.

It is supposed to fall to -9C in central Kansas on Sunday night/Monday morning.

* The Canadian Oilseed Processors Association said members crushed 131,927 tonnes of canola in the week ending Dec. 5. That was up 5.7 percent from the week before and represented a capacity use of 79 percent, which still lags the rate so far this year of 88 percent.

 

Winnipeg (per tonne)

Canola Jan 13  $598.60, down $0.80       -0.13%

Canola Mar 13  $595.10, down $2.00       -0.33%

Canola May 13  $593.30, down $2.20       -0.37%

Canola Jul 13  $590.00, down $1.50       -0.25%

 

Milling Wheat Dec 12  $289.20, down $1.70       -0.58%

Milling Wheat Mar 13  $301.70, down $1.70       -0.56%

Milling Wheat May 13  $304.70, down $1.70       -0.55%

 

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  $14.7225, down 19.0 cents -1.27%

Soybeans (P) Mar 13  $14.72, down 14.0       -0.94%

Soybeans (P) May 13  $14.5325, down 10.5       -0.72%

Soybeans (P) Jul 13  $14.41, down 10.0       -0.69%

 

Corn (P) Dec 12  $7.3275, down 15.0       -2.01%

Corn (P) Mar 13  $7.3725, down 14.25       -1.90%

Corn (P) May 13  $7.3925, down 13.75       -1.83%

 

Oats (P) Dec 12  $3.7475, down 6.5       -1.70%

Oats (P) Mar 13  $3.9125, down 6.75       -1.70%

Oats (P) May 13  $3.9475, down 6.5       -1.62%

 

Minneapolis (per bushel)

Spring Wheat Dec 12  $9.1725, unchanged

Spring Wheat Mar 13  $9.34, down 1.25 cents       -0.13%

Spring Wheat May 13  $9.4275, down 2.25       -0.24%

Spring Wheat Jul 13  $9.50, down 1.0       -0.11%

 

The Bank of Canada noon rate for the loonie was $1.0111 US, up from $1.0091 the day before.

The U.S. buck was 98.90 cents Cdn.

Nearby crude oil in New York fell 33 cents to $85.93 per barrel.

In the U.S. the November unemployment rate fell to a near four-year low of 7.7 percent, with a higher than expected 146,000 jobs new jobs created.

However, the main reason for the drop in the rate was that many Americans gave up the hunt for work.

In Canada the unemployment rate fell to 7.2 percent from 7.4 percent. The economy added a higher than expected 59,300 jobs.

The Toronto Stock Exchange composite rose 8.46 points, or 0.07 percent to close at 12,159.59.

The Dow Jones industrial average gained 81.09 points, or 0.62 percent, to 13,155.13 at the close.

The Standard & Poor’s 500 Index rose 4.13 points, or 0.29 percent, to finish at 1,418.07.

The Nasdaq Composite Index slipped 11.23 points, or 0.38 percent, to close at 2,978.04.

For the week, the TSX dipped 0.65 percent. The Nasdaq was down 1.1 percent, pressured by the decline in Apple.

The Dow, which does not count Apple as a component, rose one percent. The S&P 500 was up 0.1 percent.