Bargain buying, stronger veg oil, lift canola

By D’Arce McMillan

Markets editor

Twitter @darcemcmillan

Rising palm oil and bargain buying in soybeans and canola helped November canola futures edge up over $400 per tonne at the close Wednesday.

A weaker loonie and rising crude oil also leant modest support to canola.

Gains were held in check by good harvest weather in Canada and the U.S. and the general expectation of a huge harvest of soybeans and corn in the U.S. There is also talk that Canadian canola yields might be better than expected.

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The Malaysian palm oil market rose on fresh statistics that showed palm production down about 12 percent Sept. 1-20 compared to the same time the previous month. Demand in the same period was up 21-26 percent over the previous month.

The Malaysian currency has weakened recently, helping its exports of palm oil.

Traders are positioning ahead of next week’s USDA grain stocks report. Traders surveyed by Reuters expect that as of Sept. 1 there were 126 million bushels of soybeans, the lowest level in 10 years.

That shortage had led to strong cash premiums to get American farmers to deliver, but now that the harvest has started in the U.S. those premiums are rapidly falling. Reuters reported today that a U.S. soybean crushing plant in Indiana that was paying almost $15 a bushel last week is this week paying $9.80.

Corn rose more than one percent on bargain buying and thoughts that the crop is getting technically oversold. The 14-day relative strength index, or RSI, for corn futures fell to 32 on Tuesday. The rule of thumb is that an index of 30 means the contract is oversold.Canola’s 14-day relative strength index today is just over 34 percent. The nearby soybean oil contract has a 14-day relative strength index of a little more than 47 percent.

The stronger corn market helped lift wheat. Also Egypt bought a cargo of American wheat, raising hope that the U.S. price was now competitive with Black Sea wheat.

The Chicago wheat market rose 0.89 percent but Kansas and Minneapolis gained only about 0.5 percent Winter wheat was limited by expectations of increased wheat seeding in the southern U.S. Plains for 2015 and improving soil moisture.

Also, Reuters said analysts expect USDA next week to raise its estimate of the U.S. 2014 wheat harvest, due primarily to an increase in production of spring wheat.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014 400.10 +3.30 +0.83%

Canola Jan 2015 407.10 +3.80 +0.94%

Canola Mar 2015 414.30 +4.30 +1.05%

Canola May 2015 421.30 +5.00 +1.20%

Canola Jul 2015 427.50 +5.80 +1.38%

Milling Wheat Oct 2014 187.00 +1.00 +0.54%

Milling Wheat Dec 2014 191.00 +1.00 +0.53%

Milling Wheat Mar 2015 200.00 +1.00 +0.50%

Durum Wheat Oct 2014 303.20 unch 0.00%

Durum Wheat Dec 2014 309.70 unch 0.00%

Durum Wheat Mar 2015 310.70 unch 0.00%

Barley Oct 2014 123.50 unch 0.00%

Barley Dec 2014 125.50 unch 0.00%

Barley Mar 2015 126.50 unch 0.00%

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

Chicago

Soybeans Nov 2014 936.75 +0.5 +0.05%

Soybeans Jan 2015 945.25 +1.5 +0.16%

Soybeans Mar 2015 952.5 +1.5 +0.16%

Soybeans May 2015 960 +2 +0.21%

Soybeans Jul 2015 965.75 +2.25 +0.23%

Soybeans Aug 2015 968 +2 +0.21%

Soybean Meal Oct 2014 316.4 -0.7 -0.22%

Soybean Meal Dec 2014 308 -0.9 -0.29%

Soybean Meal Jan 2015 306.2 -0.1 -0.03%

Soybean Oil Oct 2014 32.62 +0.39 +1.21%

Soybean Oil Dec 2014 32.72 +0.4 +1.24%

Soybean Oil Jan 2015 32.99 +0.4 +1.23%

Corn Dec 2014 329.5 +4 +1.23%

Corn Mar 2015 342.25 +4 +1.18%

Corn May 2015 350.75 +4 +1.15%

Corn Jul 2015 358 +4 +1.13%

Corn Sep 2015 365.5 +4 +1.11%

Oats Dec 2014 340.5 +7.75 +2.33%

Oats Mar 2015 325 +4.75 +1.48%

Oats May 2015 319.25 +5 +1.59%

Oats Jul 2015 314 +2.75 +0.88%

Oats Sep 2015 318 +2.5 +0.79%

Wheat Dec 2014 480.25 +4.25 +0.89%

Wheat Mar 2015 492.25 +4 +0.82%

Wheat May 2015 501 +4.25 +0.86%

Wheat Jul 2015 508 +3.25 +0.64%

Wheat Sep 2015 519.75 +2.25 +0.43%

Minneapolis

Spring Wheat Dec 2014 538 +3.5 +0.65%

Spring Wheat Mar 2015 552.25 +2.5 +0.45%

Spring Wheat May 2015 562.25 +2 +0.36%

Spring Wheat Jul 2015 573.25 +2 +0.35%

Spring Wheat Sep 2015 584.5 +2 +0.34%

Kansas City

Hard Red Wheat Dec 2014 564.25 +2.25 +0.40%

Hard Red Wheat Mar 2015 567.5 +1.25 +0.22%

Hard Red Wheat May 2015 569.25 -0.25 -0.04%

Hard Red Wheat Jul 2015 562 -0.25 -0.04%

Hard Red Wheat Sep 2015 573.25 -1 -0.17%

Light crude oil nearby futures in New York rose $1.24 at $92.80 US per barrel on stronger than expected demand in the United States. However, the world price as measured by the Brent North Sea price closed at a 26 month low on weak German business confidence and increased production in Libya, Nigeria and Iraq

The Canadian dollar at noon was 90.17 cents US, down from 90.42 cents the previous trading day. The U.S. dollar at noon was $1.1090 Cdn.

Sales of new U.S. single-family homes surged 18 percent in August to their highest level in more than six years.

In early, unofficial tallies —

The Toronto Stock Exchange’s S&P/TSX composite index closed down 5.13 points, or 0.03 percent, at 15,120.54.

The Dow Jones industrial average rose 157.21 points, or 0.92 percent, to 17,213.08, the S&P 500 gained 15.75 points, or 0.79 percent, to 1,998.52 and the Nasdaq Composite added 46.53 points, or 1.03 percent, to 4,555.22.