March canola gains $12 on week, Argentine weather dominates market

After posting strong gains Friday morning, canola and other crop futures fell as traders kept a close watch on weather in dry Argentina.

Traders initially focused on Thursday rain that was less than forecasted, lifting grain market. Then at mid day focus switched to a weekend forecast that estimated rainfall amounts greater than previously forecasted.

Following a trend, another private forecaster, Informa this time, cut its outlook for Argentina soy and corn crops and raised the forecast for Brazil’s soy and corn.

March canola hung on for a gain, closing at $624.50, up $1.60. November closed at $561.40, up 80 cents.

For the week, March gained $12 per tonne. November gained $15.

• We will get a new official peek at canola stocks on Tuesday when Statistics Canada releases its Dec. 31 stocks numbers. Traders expect canola stocks are very tight and that high prices are needed to ration demand.

If there is a surprise and stocks are larger than expected, then maybe those who think the 2012 crop was bigger than reported will be proven correct.

The midpoint of the range in a Reuters survey of traders and analyst pegs canola stocks Dec. 31 at 7.5 million tonnes.

• Weighing down canola prices was weaker demand from domestic crushers.

The Canadian Oilseed Processors Association said members crushed 115,438 tonnes of canola in the week ending Jan. 30, down about 19 percent from the week before.

That represented a capacity use of only 69 percent, well down from average to day of about 89 percent.

• Markets generally were in an upbeat mood after reports on U.S. employment and the economy.

January job growth was slightly underwhelming, with 157,000 jobs added, below expectations for 160,000.

However, the government revised upward its jobs numbers for November and December.

Also, U.S. manufacturing in January rose to its highest level in nine months and U.S. consumer sentiment rose more than expected. December construction spending beat forecasts.

Investors are also buoyed by what has proven to be a strong earnings report season with the majority of major publically traded companies reporting better than expected profits.

• Speculators are increasing their long positions in grains. They are net long in corn and soybeans and are reducing their net short position in wheat.

In canola, commodity funds are estimated to hold a long position of 22,000 March contracts.

• A long term weather forecast sees dry Kansas, Nebraska and Colorado getting moisture Feb. 8-9.

 

Winnipeg ICE Futures (per tonne)

Canola Mar 13  $624.50, up $1.60       +0.26%

Canola May 13  $614.00, up $1.30       +0.21%

Canola Jul 13  $604.30, up $2.00       +0.33%

Canola Nov 13  $561.40, up $0.80       +0.14%

 

Milling Wheat Mar 13  $291.00, unchanged

Milling Wheat May 13  $294.00, unchanged

Milling Wheat Jul 13  $296.00, unchanged

 

Durum Wheat Mar 13  $312.40, unchanged

Durum Wheat May 13  $316.40, unchanged

Durum Wheat Jul 13  $319.40, unchanged

Durum Wheat Oct 13  $304.70, unchanged

 

Barley Mar 13  $241.50, unchanged

Barley May 13  $242.50, unchanged

Barley Jul 13  $243.00, unchanged

Barley Oct 13  $243.00, unchanged

 

Chicago (per bushel)

Soybeans (P) Mar 13  $14.7425, up 5.75 cents       +0.39%

Soybeans (P) May 13  $14.655, up 5.75       +0.39%

Soybeans (P) Jul 13  $14.5525, up 5.75       +0.40%

Soybeans (P) Aug 13  $14.26, up 6.75       +0.48%

Soybeans (P) Sep 13  $13.745, up 6.75       +0.49%

Soybeans (P) Nov 13  $13.325, up 4.75       +0.36%

 

Corn (P) Mar 13  $7.36, down 4.5       -0.61%

Corn (P) May 13  $7.3775, down 4.25       -0.57%

Corn (P) Jul 13  $7.2875, down 4.5       -0.61%

Corn (P) Sep 13  $6.1625, up 1.0       +0.16%

Corn (P) Dec 13  $5.92, up 1.0       +0.17%

 

Oats (P) Mar 13  $3.5925, down 0.75       -0.21%

Oats (P) May 13  $3.6575, down 1.25       -0.34%

Oats (P) Jul 13  $3.71, down 1.0       -0.27%

Oats (P) Sep 13  $3.7025, down 1.0       -0.27%

Oats (P) Dec 13  $3.675, down 1.5       -0.41%

 

Minneapolis (per bushel)

Spring Wheat Mar 13  $8.5175, down 13.25 cents       -1.53%

Spring Wheat May 13  $8.6425, down 13.25       -1.51%

Spring Wheat Jul 13  $8.74, down 13.0       -1.47%

Spring Wheat Sep 13  $8.755, down 13.25       -1.49%

 

The Bank of Canada noon rate for the loonie was $1.0013 US, up from $1.0008 the day before.

The U.S. buck was 99.87 cents US.

Crude oil rose 28 cents to $97.77 per barrel.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 83.59 points, or 0.66 percent, at 12,768.83.

The Dow Jones industrial average closed up 149.21 points, or 1.08 percent, at 14,009.79.

The Standard & Poor’s 500 Index rose 15.06 points, or 1.01 percent, closing at 1,513.17.

The Nasdaq Composite Index ended up 36.97 points, or 1.18 percent, at 3,179.10.

The Dow industrials topped 14,000 for the first time since mid-October 2007 and the S&P touched its highest since December of that year.

The gains are the fastest start to the year for equities in 16 years.

For the week, the TSX fell 0.4 percent, the Dow rose 0.8 percent, the S&P 500 rose 0.7 percent and the Nasdaq climbed 0.9 percent.