Canola bounces back from oversold conditions on tight stocks, slow farmer selling

Oilseeds bounced off of Tuesday’s lows as traders bought back into the market after three days of profit taking.

Canola gained more than soybeans, supported by very tight stocks, slow farmer selling and ideas that it had become oversold.

March canola closed at $628.60, up $6.60. November closed at $552.90, up $7.20.

Early in the day, canola had been lower, reacting to the same pressures that had pushed down all crop prices for the past few days:

• Better weather this week in South America and forecasts for more moisture in the dry U.S. Plains next week;

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• A speculator/investment fund long liquidation from commodities.

The question is whether this is a dead cat bounce before further declines, or is this sudden shift in market sentiment toward the bearish side overdone?

Will a few showers in Argentina make a substantial difference to production? Do a couple of snowstorms in the U.S. Plains mean we can stop worrying about the drought there?

We still are caught in this strong divergence of opinion about whether the next U.S. will seen normal trend yields or whether the drought in the central Plains and the western part of the Midwest will continue and hurt yields.

• While speculators are pulling back, commercials are still buying and that indicates the companies actually involved in agriculture remain worried.

• Although there are occasional weather reports that say excess moisture is delaying Brazil’s soy harvest the numbers tell a different story. Reuters reports that Brazilian analyst Celeres says the soybean harvest is 12 percent complete, above the five-year average of seven percent.

Bar Chart’s technical points for March canola are support at $610.47, pivot point at $624.07 and resistance at $637.67.

• Wet snow in Saskatoon this afternoon on top of above average snow pack. Snow pack also well above normal in Regina, Indian Head, Yorkton, Wynyard regions. Are we in for another delayed/impeded seeding spring in Saskatchewan?

Winnipeg ICE Futures (per tonne)

Canola Mar 13 $628.60, up $6.60 +1.06%

Canola May 13 $615.20, up $5.80 +0.95%

Canola Jul 13 $601.10, up $6.90 +1.16%

Canola Nov 13 $552.90, up $7.20 +1.32%

Milling Wheat Mar 13 $291.00, unchanged

Milling Wheat May 13 $294.00, unchanged

Milling Wheat Jul 13 $296.00, unchanged

Milling Wheat Oct 13 $296.00, unchanged

Durum Wheat Mar 13 $308.20, down $1.00 -0.32%

Durum Wheat May 13 $312.20, down $1.00 -0.32%

Durum Wheat Jul 13 $315.20, down $1.00 -0.32%

Durum Wheat Oct 13 $300.50, down $1.00 -0.33%

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 14.23, up 2.25 +0.16%

Soybeans (P) May 13 $14.135, up 4.0 +0.28%

Soybeans (P) Jul 13 $14.0475, up 3.75 +0.27%

Soybeans (P) Aug 13 $13.695, up 2.75 +0.20%

Soybeans (P) Sep 13 $13.1025, up 1.5 +0.11%

Soybeans (P) Nov 13 $12.725, down 3.5 -0.27%

Corn (P) Mar 13 $6.955, down 0.75 -0.11%

Corn (P) May 13 $6.935, down 2.0 -0.29%

Corn (P) Jul 13 $6.8325, down 3.75 -0.55%

Corn (P) Sep 13 $5.83, up 1.75 +0.30%

Corn (P) Dec 13 $5.6425, up 1.25 +0.22%

Oats (P) Mar 13 $3.80, up 2.25 +0.60%

Oats (P) May 13 $3.7175, up 2.0 +0.54%

Oats (P) Jul 13 $3.70, up 2.0 +0.54%

Oats (P) Sep 13 $3.6925, up 2.0 +0.54%

Oats (P) Dec 13 $3.645, up 0.5 +0.14%

Minneapolis (per bushel)

Spring Wheat Mar 13 $8.23, up 7.0 +0.86%

Spring Wheat May 13 $8.3875, up 8.0 +0.96%

Spring Wheat Jul 13 $8.4725, up 6.5 +0.77%

Spring Wheat Sep 13 $8.5175, up 6.75 +0.80%

Spring Wheat Dec 13 $8.5925, up 7.5 +0.88%

The Bank of Canada noon rate for the loonie was 99.80 cents US, up from 99.71 cents on Tuesday.

The U.S. greenback was $1.0020 Cdn.

Crude oil in New York fell 50 cents to $97.01 per barrel.

The Toronto Stock Exchange’s S&P/TSX composite index closed down 13.74 points, or 0.11 percent, at 12,775.28.

The Dow Jones industrial average fell 35.79 points or 0.26 percent, to 13,982.91.

The S&P 500 gained 0.9 point or 0.06 percent, to 1,520.33.

The Nasdaq Composite added 10.38 points or 0.33 percent, to 3,196.88.

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