Wheat takes drivers seat in crop market; oilseeds in back seat

By D’Arce McMillan, Markets editor

Twitter @ darcemcmillan

Canola edged higher on Friday, but on the week the January contract fell $7.30 or 1.7 percent.

The soybean complex has turned weaker and wheat has become the market leader with more gains today.

Corn slipped back today but posted a 3.8 percent gain on the week, the fifth weekly gain in six weeks.

It has climbed nearly 20 percent since hitting a five-year low of $3.18 ¼ on Oct. 1.

The growing tensions between Russia and Ukraine and the cold weather gripping the United States have built a fire under wheat. Adding fuel to the fire:

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– Australia’s crop is suffering under dry conditions

– Russian and Ukraine wheat is under stress as it goes into winter dormancy

– Also, although there is ample supply of wheat this year, much of it is of poor quality and buyers are paying up to get wheat quality there is.

For the week, spot CBOT wheat gained 46 cents a bushel or 8.9 percent, the biggest one-week gain since July 2012.

Kansas City December hard red winter wheat gained 36.25 cents or 6.4 percent.

MGEX December spring wheat gained 43 cents or 7.9 percent over the week.

Soft wheat states still had seeding to do when the icy cold hit this week. Illinois had 16 percent of its crop to plant, Indiana had nine percent and Missouri had 26 percent.

In addition to the wheat futures rising, the spread between contract months is narrowing, indicating stronger commercial demand.

The carry in Chicago wheat between the December and March contracts is now only 2.25 cents. A week ago the carry was 11.75 cents.

USDA reported export sales of U.S. wheat in the latest week at 417,700 tonnes, topping trade expectations for 250,000 to 400,000.

As wheat takes over, the soy complex, which drove the market since the start of October, took to the back seat.

For the week, January soybeans dropped 1.6 percent. Soy meal futures were 2.8 percent lower and soy oil eased 0.6 percent.

Soy meal rallied midweek but was unable to hang on to the gain, particularly after news that American soy meal users were importing the feed ingredient from South America.

The strong price early in the week also pried loose some soybeans from farmers, lessening the immediate shortage.

Weekly export sales of U.S. soybeans were 1.07 million tonnes, below trade expectations for 1.1 million to 1.3 million.

Also, rain is increasing in central Brazil, improving production prospects there.

Canola rose today with help from a lack of farmer selling and ideas the market was oversold. The bounce back in crude oil values provided support to vegetable oils.

The inverse between January and March canola has disappeared.

Last week there was an inverse of $2.60 but now there is a carry of $3.50 a tonne.

Light crude oil nearby futures in New York rose $1.61 at US$75.82 per barrel. Ministers from OPEC members Venezuela and Iran are visiting other members to lobby for production reductions to lift the price of oil.

The Canadian dollar at noon was US88.54 cents, up from US88.11 cents the previous trading day. The U.S. dollar at noon was C$1.1294.

The TSX composite rose 64.32 points or 0.44 percent to close at 14,843.10.

Over the week the TSX climbed about one percent.

The Dow Jones industrial average fell 16.96 points, or 0.1 percent, to 17,635.83.

The S&P 500 gained 0.53 points, or 0.03 percent, to close at a record high 2,039.86.

The Nasdaq Composite added 8.40 points, or 0.18 percent, to 4,688.54.

On the week, the Dow rose 0.4 percent, the S&P 500 rose 0.4 percent and the Nasdaq climbed 1.6 percent to a 14 year high.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jan 2015 427.80 +3.20 +0.75%

Canola Mar 2015 431.30 +2.50 +0.58%

Canola May 2015 433.20 +2.00 +0.46%

Canola Jul 2015 435.40 +0.90 +0.21%

Canola Nov 2015 431.70 -0.30 -0.07%

Milling Wheat Dec 2014 230.00 +2.00 +0.88%

Milling Wheat Mar 2015 237.00 +2.00 +0.85%

Milling Wheat May 2015 240.00 +2.00 +0.84%

Durum Wheat Dec 2014 356.50 unch 0.00%

Durum Wheat Mar 2015 357.50 unch 0.00%

Durum Wheat May 2015 357.50 unch 0.00%

Barley Dec 2014 160.00 +2.00 +1.27%

Barley Mar 2015 163.00 +3.00 +1.88%

Barley May 2015 163.00 +3.00 +1.88%

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

Chicago

Soybeans Jan 2015 1022.5 -31 -2.94%

Soybeans Mar 2015 1030.25 -29.5 -2.78%

Soybeans May 2015 1036.75 -27.75 -2.61%

Soybeans Jul 2015 1042.25 -26.75 -2.50%

Soybeans Aug 2015 1043.25 -26.25 -2.45%

Soybeans Sep 2015 1026 -23 -2.19%

Soybean Meal Dec 2014 379.9 -13.6 -3.46%

Soybean Meal Jan 2015 365 -14.7 -3.87%

Soybean Meal Mar 2015 350.1 -15.1 -4.13%

Soybean Oil Dec 2014 32.2 +0.13 +0.41%

Soybean Oil Jan 2015 32.34 +0.11 +0.34%

Soybean Oil Mar 2015 32.56 +0.12 +0.37%

Corn Dec 2014 381.75 -4.5 -1.17%

Corn Mar 2015 394.25 -4.5 -1.13%

Corn May 2015 402.75 -4.5 -1.10%

Corn Jul 2015 409.75 -4.5 -1.09%

Corn Sep 2015 416 -5 -1.19%

Oats Dec 2014 339.5 +0.75 +0.22%

Oats Mar 2015 341.5 -0.5 -0.15%

Oats May 2015 343 unch 0.00%

Oats Jul 2015 338.5 unch 0.00%

Oats Sep 2015 337 -2.25 -0.66%

Wheat Dec 2014 560.5 +6.75 +1.22%

Wheat Mar 2015 562.75 +6.75 +1.21%

Wheat May 2015 569.5 +7 +1.24%

Wheat Jul 2015 575.5 +7 +1.23%

Wheat Sep 2015 584.25 +6.75 +1.17%

Minneapolis

Spring Wheat Dec 2014 589.25 +5 +0.86%

Spring Wheat Mar 2015 596.75 +4 +0.67%

Spring Wheat May 2015 604.5 +3.5 +0.58%

Spring Wheat Jul 2015 613 +3.5 +0.57%

Spring Wheat Sep 2015 621.75 +3.5 +0.57%

Kansas City

Hard Red Wheat Dec 2014 605.5 +0.25 +0.04%

Hard Red Wheat Mar 2015 608.25 +2.25 +0.37%

Hard Red Wheat May 2015 611.75 +2.5 +0.41%

Hard Red Wheat Jul 2015 610.25 +3.75 +0.62%

Hard Red Wheat Sep 2015 621.75 +3.5 +0.57%

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