Canola drops again, today on weaker vegetable oil

Even another half cent drop in the loonie couldn’t stop canola closing lower Tuesday.

The huge crop and transportation issues have the market in a solidly negative bias. Today, weaker vegetable oil values helped to pressure canola lower.

The market started to pay attention to the sweltering temperatures and lack of rain this week in Argentina. Temperatures of about 38-40 C are expected for several days.

It helped lift soybeans, as did steady demand from China for U.S. soybeans.

While the weather is working against Argentina’s crop, which USDA forecast at 54.5 million tonnes, conditions remain mostly good for Brazil to hit a record soybean crop of about 90 million tonnes.

Read Also

Media reports suggest U.S. dairy access to Canada a topic of conversation in Ottawa

Globe and Mail article suggests U.S. dairy access to Canada is back as a topic of conversation in Ottawa

Oilseed analysts Oil World said today the big South American crops, coupled with expectations that U.S. farmers will seed more soybeans this spring, should cause soybean prices to fall. It also said soy oil prices are hurt by reduced demand for biodiesel in the U.S. and Argentina and by good supply of competing oils such as sunflower.

Traders in corn took profits today, pushing futures down after two days of modest gains.

Wheat edged higher on bargain buying and forecasts for dry weather across the southern Plains winter wheat belt. The crop is still dormant, but will need moisture when it wakes up this spring.

There will be lots of talk this week at Crop Production Week in Saskatoon about the burdensome ending stocks in Canada. Bruce Burnett of the CWB last week at St. Jean Farm Days said the price depressing effects flowing from the giant 2013 crop and the inability of the railways to move it will linger well into the 2014-15 crop year.

Burnett noted that the crop was about 20 million tonnes larger than the previous year but exports will pick up only about three-3.5 million tonnes, meaning the carry-out will grow by about 16-17 million tonnes for all crops.

Read the full story in the Jan. 16 Western Producer.

Missed reporting on this last week: USDA increased domestic soy oil stocks for the end of 2013-14 to 1.745 billion pounds, up from 1.690 billion in the December report. Ending stocks in 2012-13 were 1.705 lb.

USDA pegged global 2013-14 soy oil ending stocks at 3.5 million tonnes, compared to 3.51 million in December. Ending stocks for 2012-13 were 3.52 million tonnes.
Neither situation seems to be terribly bearish.

A little more bearish is the global vegetable oil ending stocks. USDA pegged 2013-14 20.37 million tonnes, a bit smaller than the December outlook, but up from last year’s 18.17 million tonnes and 2011-12’s 17.51 million.

Winnipeg ICE Futures Canada dollars per tonne

Canola Mar 2014    423.00    -2.90    -0.68%
Canola May 2014    432.40    -2.60    -0.60%
Canola Jul 2014    441.30    -2.20    -0.50%
Canola Nov 2014    455.20    -1.50    -0.33%
Canola Jan 2015    461.70    -0.10    -0.02%

Milling Wheat Mar 2014    183.00    +1.00    +0.55%
Milling Wheat May 2014    189.00    +1.00    +0.53%
Milling Wheat Jul 2014    191.00    +1.00    +0.53%

Durum Wheat Mar 2014    243.00    unch    0.00%
Durum Wheat May 2014    247.00    unch    0.00%
Durum Wheat Jul 2014    248.00    unch    0.00%

Barley Mar 2014    127.00    -9.50    -6.96%
Barley May 2014    129.00    -9.50    -6.86%
Barley Jul 2014    129.00    -9.50    -6.86%

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

Chicago
Soybeans Mar 2014    1307    +12.75    +0.99%
Soybeans May 2014    1288.25    +14    +1.10%
Soybeans Jul 2014    1272.75    +12    +0.95%
Soybeans Aug 2014    1233.25    +8.75    +0.71%
Soybeans Sep 2014    1165.75    +6    +0.52%
Soybeans Nov 2014    1119.5    +5.5    +0.49%

Soybean Meal Mar 2014    430.1    +8.2    +1.94%
Soybean Meal May 2014    415.4    +6.7    +1.64%

Soybean Meal Jul 2014    406.8    +5.3    +1.32%

Soybean Oil Mar 2014    37.76    -0.08    -0.21%
Soybean Oil May 2014    38.1    -0.08    -0.21%
Soybean Oil Jul 2014    38.47    -0.08    -0.21%

Corn Mar 2014    431.5    -3    -0.69%
Corn May 2014    439.5    -3    -0.68%
Corn Jul 2014    446.25    -3    -0.67%
Corn Sep 2014    451    -2.75    -0.61%
Corn Dec 2014    456    -2.5    -0.55%

Oats Mar 2014    390.25    -2.75    -0.70%
Oats May 2014    345    -1    -0.29%
Oats Jul 2014    323.25    -1    -0.31%
Oats Sep 2014    307.25    +0.75    +0.24%
Oats Dec 2014    298.75    -0.75    -0.25%

Wheat Mar 2014    579.25    +5.75    +1.00%
Wheat May 2014    586.25    +5.75    +0.99%
Wheat Jul 2014    593.25    +6    +1.02%
Wheat Sep 2014    602.75    +6    +1.01%
Wheat Dec 2014    615.25    +4.5    +0.74%

Minneapolis
Spring Wheat Mar 2014    621    +3.25    +0.53%
Spring Wheat May 2014    624    +2.5    +0.40%
Spring Wheat Jul 2014    631.75    +2.75    +0.44%
Spring Wheat Sep 2014    639    +1.75    +0.27%
Spring Wheat Dec 2014    652.75    +2.5    +0.38%

Kansas City
KCBT Red Wheat Mar 2014    632    +12.25    +1.98%
KCBT Red Wheat May 2014    628.75    +10    +1.62%

KCBT Red Wheat Jul 2014    627.25    +9    +1.46%
KCBT Red Wheat Sep 2014    639.25    +8.5    +1.35%
KCBT Red Wheat Dec 2014    653.25    +7.5    +1.16%

Light crude oil nearby futures in New York rose 79 cents at $92.59 US per barrel.

The Canadian dollar at noon was 91.46 cents US, down from 92 cents the previous trading day. The U.S. dollar at noon was $1.0934 Cdn.

The TSX composite was trading up in the afternoon.

U.S. stock markets were also higher on a report that showed U.S. retail sales in December rose 0.2 percent, above the expected 0.1 percent gain.

Core retail sales, which exclude  auto sales, rose by 0.7 percent, well above the forecast for a 0.4 percent rise.

The report reduced the anxiety that was created by Friday’s poor job creation reports for the U.S. and Canada.

The strong retail report helped the U.S. dollar rally against the loonie.