Canola prices rally for second day; Australia has canola export problem

Monday might have marked a key technical reversal for canola futures as the market moved higher again Tuesday, although the increase was modest.

The gains were supported by:

• Short covering,

• Sentiment that the oilseed was undervalued compared to other oilseeds,

• Crusher buying and

• Slower producer sales

Support also came from rising soybeans, which were supported by stronger soy meal prices and exports.

However, soy oil fell, which was not good considering its tight connection to canola prices. The strong pace of soybean crush in the U.S., designed to meet strong soy meal demand, is leading to rising monthly stocks of soy oil.

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Sales of Australian canola to China might have hit a snag. Last week, China for the first time reported the presence of small conical snails and common white snails in a 62,000 tonne shipment of Australian canola. The snails are a pest in Australia and China has had the white snail on its list of quarantine pests since 2012.

Corn and oats rose but wheat fell again on ample supply.

Corn was up on short covering and on news that South Korea would take early delivery of U.S. corn. The country is providing a relief value for corn that likely would have gone to China. But shipments to China are uncertain now that it has rejected three shipments of U.S. corn because of unapproved GM content.

Warm, dry weather in Argentina and southern Brazil that could dry soils added support to oilseeds. Seeding is mostly complete in Brazil and soybean seeding in Argentina is about two thirds complete.

Commodity traders generally were nervous as the U.S. Federal Reserve started two days of meetings. The market awaits whether the Fed on Wednesday will provide guidance on when it expected to start tapering off its huge stimulus bond buying program, which holds down interest rates.

The U.S. economy has been doing better in recent months, raising expectation that the Fed might believe it is safe to start trimming its stimulus.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jan 2014 446.60 +2.60 +0.59%

Canola Mar 2014 457.10 +2.70 +0.59%

Canola May 2014 466.50 +3.20 +0.69%

Canola Jul 2014 474.70 +3.60 +0.76%

Canola Nov 2014 486.40 +3.50 +0.72%

Milling Wheat Mar 2014 193.00 -2.00

Milling Wheat May 2014 203.00 -2.00

Milling Wheat Jul 2014 207.00 -2.00

Durum Wheat Mar 2014 245.00 -1.00

Durum Wheat May 2014 249.00 -1.00

Durum Wheat Jul 2014 249.00 -1.00

Barley Mar 2014 146.00 -1.00

Barley May 2014 148.00 unch 0.00%

Barley Jul 2014 148.00 unch 0.00%

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

Chicago

Soybeans Jan 2014 1346.5 +8.75 +0.65%

Soybeans Mar 2014 1334.75 +9.5 +0.72%

Soybeans May 2014 1317.25 +9 +0.69%

Soybeans Jul 2014 1303.25 +9.25 +0.71%

Soybeans Aug 2014 1269.75 +8.75 +0.69%

Soybeans Sep 2014 1209.25 +6.5 +0.54%

Soybean Meal Jan 2014 448 +9 +2.05%

Soybean Meal Mar 2014 436.6 +6.8 +1.58%

Soybean Meal May 2014 425.2 +5.9 +1.41%

Soybean Oil Jan 2014 39.31 -0.44 -1.11%

Soybean Oil Mar 2014 39.63 -0.47 -1.17%

Soybean Oil May 2014 40.03 -0.46 -1.14%

Corn Mar 2014 426.75 +3.5 +0.83%

Corn May 2014 435.25 +3.5 +0.81%

Corn Jul 2014 442 +3.75 +0.86%

Corn Sep 2014 447.75 +3.75 +0.84%

Corn Dec 2014 454.25 +4 +0.89%

Oats Mar 2014 354.75 +9.25 +2.68%

Oats May 2014 334 +6.5 +1.98%

Oats Jul 2014 327.5 +5 +1.55%

Oats Sep 2014 327.75 +5 +1.55%

Oats Dec 2014 308 +2.25 +0.74%

Wheat Mar 2014 619.75 -2 -0.32%

Wheat May 2014 626 -1.75 -0.28%

Wheat Jul 2014 627.5 -1.75 -0.28%

Wheat Sep 2014 636.5 -1.75 -0.27%

Wheat Dec 2014 650.25 -1.5 -0.23%

Minneapolis

Spring Wheat Mar 2014 650 -4.25 -0.65%

Spring Wheat May 2014 660.25 -4.75 -0.71%

Spring Wheat Jul 2014 672 -3.5 -0.52%

Spring Wheat Sep 2014 680.25 -5 -0.73%

Spring Wheat Dec 2014 693.25 -3.25 -0.47%

Kansas City

KCBT Red Wheat Mar 2014 660.5 -5 -0.75%

KCBT Red Wheat May 2014 663.75 -5 -0.75%

KCBT Red Wheat Jul 2014 663 -4.5 -0.67%

KCBT Red Wheat Sep 2014 673.25 -4.5 -0.66%

KCBT Red Wheat Dec 2014 684.75 -4.5 -0.65%

Light crude oil nearby futures in New York dropped 26 cents at $97.22 US per barrel.

The Canadian dollar at noon was 94.25 cents US, down from 94.54 cents the previous trading day. The U.S. dollar at noon was $1.0610 Cdn.

In unofficial tallies —

The Toronto Stock Exchange’s S&P/TSX composite index closed down 4.32 points, or 0.03 percent, at 13,180.09.

The Dow Jones industrial average slipped 9.31 points, or 0.06 percent, to close at 15,875.26.

The Standard & Poor’s 500 Index declined 5.54 points, or 0.31 percent, to finish at 1,781.00.

The Nasdaq Composite Index fell 5.84 points, or 0.14 percent, to end at 4,023.68.

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