A bearish USDA report, falling crude oil values and a half-cent gain in the loonie pressured canola futures lower.
March canola fell below technical support, triggering selling that temporarily pushed the price down to another support level at $457 before bouncing back a little, closing at $460.30 down $4.80 or 1.03 percent and May closed at $469.00, down $5.30 or 1.12 percent.
The American dollar fell against most currencies. For crops traded on U.S. exchanges — corn, soybeans and wheat — the weaker greenback partly offset the negative fall out from the USDA report.
The USDA report was mildly bearish, but the market had been falling recently and much off the impact was already priced into the market.
The USDA forecasts for corn, soybean and wheat U.S. year end stocks were a little higher than the average of trade expectations.
The higher domestic stocks numbers reflected slow U.S. corn and wheat exports and slower domestic soybean crush.
USDA also raised world wheat ending stocks more than expected and added 1.5 million tonnes to Argentina’s soybean crop forecast.
USDA pegged global wheat ending stocks for the 2015-16 crop year at 238.87 million tonnes, up from its January forecast of 232.04 million.
West Texas crude oil fell about five percent and Brent crude fell about seven percent.
Sunday’s talks between Saudi oil minister Ali al-Naimi and his Venezuelan counterpart produced no tangible signs of progress on coordinated oil production cuts between OPEC and non-OPEC suppliers, Reuters reported.
Oil prices were pressured further by weak demand outlooks issued by the U.S. government’s Energy Information Administration and the Paris-based International Energy Information.
On the surface today’s USDA report reinforced the negative sentiment in wheat markets, but futures closed mixed with Chicago and Kansas down slightly, while Minneapolis spring wheat edged higher.
U.S. wheat exports are forecast to be the lowest since 1971-72.
U.S. wheat ending stocks were raised 25 million bushels and are the largest since 2009-10.
The USDA says Canada’s wheat exports at 22 million tonnes, will top American exports at just over 21 million tonnes.
The increase in world wheat carryout stocks was mostly due to a four million tonne decrease in China’s consumption as government policies reduce the food and feed uses of wheat in favour of other grains. However, this really should not have any impact on world trade.
Year end stocks for major exporters reflected a shifting from the U.S. to what the USDA calls “traditional exporters” — Canada, Australia, Argentina and the European Union.
So although American carry out stocks are a little higher this month, the stocks for all the traditional exporters are slightly smaller and the total for U.S. and traditional exporters together are slightly smaller than in last month’s report.
Year end stock forecasts for the major Black Sea region exporters barely changed.
As stated, USDA raised its forecast for Argentina’s soybean harvest but It left its outlook for Brazil soybean production unchanged at 100 million tonnes compared to the average analyst forecast of 99.43 million.
The corn production outlook was raised for both Argentina and Brazil.
Uncertainty about demand from top global wheat importer Egypt hang over the market, pressuring European markets in particular., Reuters reported
Bunge Ltd. launched legal proceedings against Egypt’s state grain buyer, GASC, over a rejected cargo of French wheat.
The drop in oil had the energy-heavy Toronto Stock Exchange composite index down about two percent on the day, late in afternoon trade
American exchanges were down early on the energy slump. But a late rally in other sectors helped lift indexes into positive territory.
Light crude oil nearby futures in New York were down $1.75 to US$27.94 per barrel.
The Canadian dollar at noon was US72.36 cents, down from 71.83 cents the previous trading day. The U.S. dollar at noon was C$1.3820
Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2016 460.30 -4.80 -1.03%
Canola May 2016 469.00 -5.30 -1.12%
Canola Jul 2016 474.70 -5.60 -1.17%
Canola Nov 2016 478.60 -7.20 -1.48%
Canola Jan 2017 481.80 -6.90 -1.41%
Milling Wheat Mar 2016 227.00 +2.00 +0.89%
Milling Wheat May 2016 230.00 +2.00 +0.88%
Milling Wheat Jul 2016 234.00 +2.00 +0.86%
Durum Wheat Mar 2016 317.00 +6.00 +1.93%
Durum Wheat May 2016 325.00 +7.00 +2.20%
Durum Wheat Jul 2016 310.00 +7.00 +2.31%
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 863.25 +0.75 +0.09%
Soybeans May 2016 867.25 +0.75 +0.09%
Soybeans Jul 2016 873 +0.5 +0.06%
Soybeans Aug 2016 875 +0.5 +0.06%
Soybeans Sep 2016 875 +0.5 +0.06%
Soybeans Nov 2016 878 +0.75 +0.09%
Soybean Meal Mar 2016 263.1 -1.4 -0.53%
Soybean Meal May 2016 265.1 -1.1 -0.41%
Soybean Meal Jul 2016 267.8 -1 -0.37%
Soybean Oil Mar 2016 30.7 -0.05 -0.16%
Soybean Oil May 2016 30.94 -0.05 -0.16%
Soybean Oil Jul 2016 31.18 -0.05 -0.16%
Corn Mar 2016 361 -1.25 -0.35%
Corn May 2016 366 -1 -0.27%
Corn Jul 2016 371 -1.25 -0.34%
Corn Sep 2016 376.25 -1.25 -0.33%
Corn Dec 2016 384 -1.5 -0.39%
Oats Mar 2016 195.75 -3.25 -1.63%
Oats May 2016 200.75 -0.25 -0.12%
Oats Jul 2016 209.25 +0.5 +0.24%
Oats Sep 2016 214.25 +0.25 +0.12%
Oats Dec 2016 212.5 +3 +1.43%
Wheat Mar 2016 457.5 -1 -0.22%
Wheat May 2016 461.75 -1.25 -0.27%
Wheat Jul 2016 466.5 -1.75 -0.37%
Wheat Sep 2016 475.25 -1.75 -0.37%
Wheat Dec 2016 489.25 -1.75 -0.36%
Minneapolis
Spring Wheat Mar 2016 487.5 +1.25 +0.26%
Spring Wheat May 2016 492.5 +0.5 +0.10%
Spring Wheat Jul 2016 502 +2 +0.40%
Spring Wheat Sep 2016 512.5 +2.25 +0.44%
Spring Wheat Dec 2016 527.75 +1.75 +0.33%
Kansas City
Hard Red Wheat Mar 2016 445 -0.5 -0.11%
Hard Red Wheat May 2016 454.75 -0.75 -0.16%
Hard Red Wheat Jul 2016 464.75 -0.5 -0.11%
Hard Red Wheat Sep 2016 478.75 -0.5 -0.10%
Hard Red Wheat Dec 2016 498.75 -0.75 -0.15%
