Canola futures edge higher, brushing off falling crude oil

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Published: February 2, 2016

Crop futures including canola edged higher Tuesday, brushing off a 5.5 percent plunge in crude oil futures, with West Texas crude again below US$30.

Hopes that Russia and OPEC members would negotiate a production reduction are fading, putting renewed pressure on oil. Global equity markets sagged along with oil.

But canola, soybeans, corn and wheat rose modestly, posting gains of less than one percent.

Canola’s gain halted a three-day slide.

The market awaits Statistics Canada’s Dec. 31 stocks report to help it determine just how much canola and other crops are around this year.

Some analysts think Statistics Canada’s final crop report of the season, issued in early December, overstated the size of the canola crop.

There was little market moving news in the grains area to account for today’s rally and most of the movement was related to technical trading and short covering.

Kansas, Nebraska and Iowa are getting snow from the blizzard moving northeast across the central United States today. Rain is falling in the eastern Midwest.

The weather caused some livestock packing plants to close.

The condition of the U.S. winter wheat crop is generally good: Wheat ratings improve in Kansas, Illinois in January

We also have an update on oats futures: Oats trade looks to StatsCan stocks report for direction

Egypt, one of the world’s largest wheat buyers, has the trade frustrated over its new ergot acceptance policy.

Reuters reports Egypt’s agricultural quarantine authorities have adopted a zero-tolerance line, which is at odds with a limit allowed by state wheat buyer GASC.

Traders say such a standard is unworkable.

Under pressure from the quarantine authority, GASC rejected a 63,000 tonne wheat shipment this week for containing traces of ergot fungus. The amount was less than the 0.05 percent threshold normally allowed.

Traders boycotted an Egyptian wheat tender this week in protest. Over concerns that shipments would be rejected at port because of the tough new import standards that do not follow internationally accepted tolerances.

So far, Egypt has rejected three wheat import shipments due to the presence of ergot, a ministry of agriculture spokesman told Reuters on Tuesday.

Egypt imports around 10 million tonnes of wheat each year, most of which goes to providing cheap, subsidized bread to feed its exploding population of 90 million.

Egypt has said it has enough strategic wheat supplies to last until May 11.

However, much of the country’s calculated reserves sit outside Egypt in shipments that still may be rejected, traders said, raising the possibility that reserves could hit critical levels sooner than anticipated.

Light crude oil nearby futures in New York were down $1.74 to US$29.88 per barrel.

The Canadian dollar at noon was US71.23 cents, down from 71.40 cents the previous trading day. The U.S. dollar at noon was C$1.4040.

The TSX closed down about two percent.

Dow Jones industrial average fell 295.16 points, or 1.79 percent, to 16,154.02, the S&P 500 lost 36.33 points, or 1.87 percent, to 1,903.05 and the Nasdaq Composite dropped 103.42 points, or 2.24 percent, to 4,516.95.

 

Winnipeg ICE Futures Canada dollars per tonne

Canola Mar 2016   473.80   +2.70   +0.57%

Canola May 2016   483.30   +2.60   +0.54%

Canola Jul 2016   489.10   +2.40   +0.49%

Canola Nov 2016   489.80   +2.30   +0.47%

Canola Jan 2017   491.60   +2.70   +0.55%

 

Milling Wheat Mar 2016   235.00   unch   0.00%

Milling Wheat May 2016   238.00   unch   0.00%

Milling Wheat Jul 2016   242.00   +1.00   +0.41%

 

Durum Wheat Mar 2016   322.00   unch   0.00%

Durum Wheat May 2016   330.00   unch   0.00%

Durum Wheat Jul 2016  330.00   unch   0.00%

 

Barley Mar 2016   190.00   unch   0.00%

Barley May 2016   194.00   unch   0.00%

Barley Jul 2016   196.00   unch   0.00%

 

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

 

Chicago

Soybeans Mar 2016   886.25   +5.5   +0.62%

Soybeans May 2016   888.75   +6.5   +0.74%

Soybeans Jul 2016   894.75   +7   +0.79%

Soybeans Aug 2016   896.25   +7   +0.79%

Soybeans Sep 2016   895   +6.75   +0.76%

Soybeans Nov 2016   897   +6.75   +0.76%

 

Soybean Meal Mar 2016   274.6   +3.6   +1.33%

Soybean Meal May 2016   276.5   +3.4   +1.24%

Soybean Meal Jul 2016   278.8   +3.3   +1.20%

 

Soybean Oil Mar 2016   30.79   +0.03   +0.10%

Soybean Oil May 2016   31   +0.04   +0.13%

Soybean Oil Jul 2016   31.24   +0.04   +0.13%

 

Corn Mar 2016   372.5   +1.25   +0.34%

Corn May 2016   377.5   +1.75   +0.47%

Corn Jul 2016   382.5   +2   +0.53%

Corn Sep 2016   387   +2.25   +0.58%

Corn Dec 2016   394   +2   +0.51%

 

Oats Mar 2016   200.25   +3   +1.52%

Oats May 2016   208   +2   +0.97%

Oats Jul 2016   214.5   +1.75   +0.82%

Oats Sep 2016   220   +1.5   +0.69%

Oats Dec 2016   215.75   +0.25   +0.12%

 

Wheat Mar 2016   475.25   unch   0.00%

Wheat May 2016   480   -0.5   -0.10%

Wheat Jul 2016   485.25   -0.5   -0.10%

Wheat Sep 2016   493.75   -0.75   -0.15%

Wheat Dec 2016   507.25   -0.5   -0.10%

 

Minneapolis

Spring Wheat Mar 2016   495.75   +0.75   +0.15%

Spring Wheat May 2016   501.75   +1   +0.20%

Spring Wheat Jul 2016   509   +1   +0.20%

Spring Wheat Sep 2016   519.25   +1.25   +0.24%

Spring Wheat Dec 2016   534   +1   +0.19%

 

Kansas City

Hard Red Wheat Mar 2016   465.25   -1.5   -0.32%

Hard Red Wheat May 2016   475.25   -1.5   -0.31%

Hard Red Wheat Jul 2016   485.25   -1.75   -0.36%

Hard Red Wheat Sep 2016   499   -1.75   -0.35%

Hard Red Wheat Dec 2016   518.5   -1.75   -0.34%

 

 

 

About the author

D'Arce McMillan

Markets editor, Saskatoon newsroom

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