Canola hammered lower by worries over China demand and potential strike

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Published: March 21, 2014

The canola rally that began in mid February came to an abrupt end this week with heavy sell offs on Thursday and Friday .

The market was weighed down on concerns about a potential CN rail strike and on talk that China might have canceled orders.

May canola ended the week at $440.50 per tonne, down 4.5 percent on the week.

Conductors, yard workers and traffic co-ordinators represented by Teamsters Canada Rail Conference voted by a narrow margin against a tentative agreement that union officials had made with the company last month.

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Detail from the front of the CBOT building in Chicago. (Vito Palmisano/iStock/Getty Images)

U.S. grains: Soybean futures inch higher on China trade optimism

U.S. soybean futures firmed on Wednesday as traders remained hopeful for progress in trade talks with top soy buyer China and on a Japanese proposal to increase U.S. soy purchases, deals that could help U.S. farmers avert major losses.

This is the second proposal that the membership rejected.

On Friday federal labour minister Kellie Leitch urged the company and union to seek voluntary arbitration to avert a strike.

Wheat futures posted a weekly gain but settled Friday off the highs.

Minneapolis May spring wheat closed at $7.43 ¼ a bushel, an increase of 1.3 percent on the week.

The main factor driving the wheat market is the declining condition of the U.S. winter wheat crop and the dry conditions in parts of the southern plains.

Corn corn settled at $4.79 per bushel, down 1.4 percent on the week.

Soybeans had an up week, supported by concerns about the very tight stocks in the United States.

May soybeans closed at $14.08 ¾ up 1.5 percent.

Stocks look so tight in the U.S. that  there was talk that some American users might import Brazilian product.

But there are factors that could work against soybean prices, particularly in the new crop.

It is generally thought that U.S. soybean acreage will increase this spring.

Another issue is that China’s Sinograin Oils Corporation forecast the country’s soybean imports for the current crop year at between 66 and 67 million tonnes.

That is two to three million tonnes lower than the USDA’s forecast.

The Canadian Oilseed Processors Association said members crushed 136,136 tonnes of canola in the week ending March 19, up 3.8 percent.

That represented a capacity use of a little over 77 percent.

 

ICE Futures Canada, dollars per tonne

 

Canola May 2014       440.50       -14.70       -3.23%

Canola Jul 2014       449.90       -14.70       -3.16%

Canola Nov 2014       466.50       -14.10       -2.93%

Canola Jan 2015       473.40       -14.10       -2.89%

Canola Mar 2015       480.50       -13.50       -2.73%

 

Milling Wheat May 2014       222.00       -3.00       -1.33%

Milling Wheat Jul 2014       219.00       -3.00       -1.35%

Milling Wheat Oct 2014       221.00       -2.00       -0.90%

 

Durum Wheat May 2014       250.00       unch       0.00%

Durum Wheat Jul 2014       250.00       unch       0.00%

Durum Wheat Oct 2014       252.00       unch       0.00%

 

Barley May 2014       130.50       unch       0.00%

Barley Jul 2014       128.50       unch       0.00%

Barley Oct 2014       128.50       unch       0.00%

 

 

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

 

Chicago

Soybeans May 2014       1408.75       -25       -1.74%

Soybeans Jul 2014       1382.25       -27.75       -1.97%

Soybeans Aug 2014       1325.5       -28.25       -2.09%

Soybeans Sep 2014       1231.75       -19       -1.52%

Soybeans Nov 2014       1177.25       -12.25       -1.03%

Soybeans Jan 2015       1181.25       -12.75       -1.07%

Soybean Meal May 2014       455.9       -10.6       -2.27%

Soybean Meal Jul 2014       440.9       -10       -2.22%

Soybean Meal Aug 2014       418.8       -9.3       -2.17%

Soybean Oil May 2014       41.02       -0.29       -0.70%

Soybean Oil Jul 2014       41.19       -0.29       -0.70%

Soybean Oil Aug 2014       41       -0.28       -0.68%

Corn May 2014       479       +0.5       +0.10%

Corn Jul 2014       483.75       +0.25       +0.05%

Corn Sep 2014       481       -0.5       -0.10%

Corn Dec 2014       480       -0.75       -0.16%

Corn Mar 2015       488       -1       -0.20%

Oats May 2014       415       +5       +1.22%

Oats Jul 2014       373.5       +6       +1.63%

Oats Sep 2014       336.5       +0.5       +0.15%

Oats Dec 2014       327.5       +6       +1.87%

Oats Mar 2015       324.5       +9.75       +3.10%

Wheat May 2014       693.25       -10.5       -1.49%

Wheat Jul 2014       695.5       -10       -1.42%

Wheat Sep 2014       702.5       -9.5       -1.33%

Wheat Dec 2014       712       -9       -1.25%

Wheat Mar 2015       717.5       -8.25       -1.14%

 

Minneapolis

Spring Wheat May 2014       743.25       -12       -1.59%

Spring Wheat Jul 2014       739.25       -9.5       -1.27%

Spring Wheat Sep 2014       741.5       -7       -0.94%

Spring Wheat Dec 2014       748.75       -5.75       -0.76%

Spring Wheat Mar 2015       753.5       -7       -0.92%

 

Kansas City

KC HRW Wheat May 2014       771.25       -10.75       -1.37%

KC HRW Wheat Jul 2014       766.5       -10.25       -1.32%

KC HRW Wheat Sep 2014       769.75       -7.25       -0.93%

KC HRW Wheat Dec 2014       777.75       -6.25       -0.80%

KC HRW Wheat Mar 2015       778       -6       -0.77%

 

Light crude oil nearby futures in New York rose 56 cents at $99.46 US per barrel.

The Bank of Canada noon rate for the loonie was 89.33 cents US, up from 88.88 cents the previous trading day. The U.S. dollar at noon was $1.1194 Cdn.

The Toronto Stock Exchange’s S&P/TSX composite index  ended the session down 26.07 points, or 0.18 percent, at 14,335.76.

The Dow Jones industrial average fell 28.28 points or 0.17 percent, to 16,302.77.

The S&P 500 slipped 5.49 points or 0.29 percent, to 1,866.52.

The Nasdaq Composite dropped 42.498 points or 0.98 percent, to close at 4,276.788.

For the week, the TSX compositex rose 0.75 percent, the Dow rose 1.5 percent, the S&P 500 gained 1.4 percent and the Nasdaq advanced 0.7 percent.

About the author

D'Arce McMillan

Markets editor, Saskatoon newsroom

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