Canola futures rise on falling loonie; market watches for Alberta rain

Canola futures closed higher Wednesday, supported by a weaker Canadian dollar and ideas that canola was undervalued compared to the recent rise in soybeans.

July canola closed at $522.60 up $5.80 or 1.12 percent.

November closed at $519.80 up $4.20 or 0.81 percent.

VIDEO: Canada’s agricultural markets update – May 18, 2016

But today soybeans and soy oil closed lower on profit taking.

A key factor in the oilseed rally in recent weeks has been rain damage in Argentina’s crop.

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Today Reuters reported that Argentine analysts think the USDA Argentina soybean export forecast is too high.

They suggested exports for 2016-17 would fall to around 8.5 to nine million tonnes, not the 11.4 million that USDA forecasts.

In the current crop year, exports are expected to total 11.5 million.

Canola markets will be watching how forecasts for rain in dry Alberta on Thursday and Friday play out. Farmers in dry areas hope the forecasts for substantial rain prove true.

The Weather Channel forecasts 15-20 millimetres for Red Deer on Thursday and another 10-15 mm on Friday.

Drumheller could see 10-15 mm on Thursday and 15-20 on Friday. Peace River could get 30-40 mm on Thursday and about 15 on Friday.

Lesser amounts are expected elsewhere in Alberta.

Rain is expected in southern Manitoba on Monday.

Corn rose on short covering.

Wheat futures drifted lower.

The U.S. dollar rose against many currencies on ideas that the Federal Reserve might increase interest rates in June.

After the market closed Agriculture Canada released its monthly supply and demand report.

It increased its forecast for durum exports to 4.7 million tonnes, up 200,000, to reflect the steady pace to date and therefore trimmed its forecast of carryout stocks to 850,000 tonnes, down from one million in April.

It also raised its forecast for current year barley exports to 2.05 million tonnes from 1.9 million. That changed the ending stocks forcast to 1.4 million tonnes from 1.6 million in April.

It also trimmed its new crop canola seeded area slightly reflecting the recent Statistics Canada survey and also trimmed its yield forecast resulting in an expected 15.4 million tonne crop, down from 16.8 million in April.

Ag Canada forecasts a very tight 700,000 tonnes of carryout for 2016-17, however it also noted that on averge, Canadian farmers wind up seeding five percent more canola than what they expected in the March seeding survey.

Crude oil futures in New York were down 12 cents to US$48.19 per barrel.

The Canadian dollar at noon was US77.35 cents, down from 77.61 cents the previous trading day. The U.S. dollar at noon was C$1.2928.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jul 2016 522.60 +5.80 +1.12%

Canola Nov 2016 519.80 +4.20 +0.81%

Canola Jan 2017 523.90 +3.70 +0.71%

Canola Mar 2017 524.40 +3.40 +0.65%

Canola May 2017 524.50 +3.40 +0.65%

Milling Wheat Jul 2016 240.00 -1.00 -0.41%

Milling Wheat Oct 2016 234.00 unch 0.00%

Milling Wheat Dec 2016 239.00 unch 0.00%

Durum Wheat Jul 2016 297.00 unch 0.00%

Durum Wheat Oct 2016 291.00 unch 0.00%

Durum Wheat Dec 2016 293.00 unch 0.00%

Barley Jul 2016 171.00 unch 0.00%

Barley Oct 2016 171.00 unch 0.00%

Barley Dec 2016 171.00 unch 0.00%

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

Chicago

Soybeans Jul 2016 1075.25 -5 -0.46%

Soybeans Aug 2016 1077 -5.5 -0.51%

Soybeans Sep 2016 1066 -7.75 -0.72%

Soybeans Nov 2016 1057.5 -9.75 -0.91%

Soybeans Jan 2017 1056.5 -8 -0.75%

Soybeans Mar 2017 1036.75 -6.75 -0.65%

Soybean Meal Jul 2016 372.7 +3.6 +0.98%

Soybean Meal Aug 2016 368.6 +2.1 +0.57%

Soybean Meal Sep 2016 365.7 +0.9 +0.25%

Soybean Oil Jul 2016 32.45 -0.33 -1.01%

Soybean Oil Aug 2016 32.56 -0.33 -1.00%

Soybean Oil Sep 2016 32.68 -0.33 -1.00%

Corn Jul 2016 399.5 +2.5 +0.63%

Corn Sep 2016 402.25 +2.5 +0.63%

Corn Dec 2016 406 +2.25 +0.56%

Corn Mar 2017 413.25 +1.75 +0.43%

Corn May 2017 417 +1.5 +0.36%

Oats Jul 2016 193.5 -3 -1.53%

Oats Sep 2016 205 -2.75 -1.32%

Oats Dec 2016 218.25 -1.25 -0.57%

Oats Mar 2017 227.75 -0.75 -0.33%

Oats May 2017 227.75 -0.75 -0.33%

Wheat Jul 2016 480 -1.75 -0.36%

Wheat Sep 2016 490 -1.25 -0.25%

Wheat Dec 2016 506 unch 0.00%

Wheat Mar 2017 521.5 +0.75 +0.14%

Wheat May 2017 530 +1 +0.19%

Minneapolis

Spring Wheat Jul 2016 536.75 -2.5 -0.46%

Spring Wheat Sep 2016 544 -1.75 -0.32%

Spring Wheat Dec 2016 554.75 -2 -0.36%

Spring Wheat Mar 2017 563.25 -2.25 -0.40%

Spring Wheat May 2017 569 -2 -0.35%

Kansas City

Hard Red Wheat Jul 2016 456.75 -1 -0.22%

Hard Red Wheat Sep 2016 473 -1.25 -0.26%

Hard Red Wheat Dec 2016 497 -1.5 -0.30%

Hard Red Wheat Mar 2017 513.25 -1.25 -0.24%

Hard Red Wheat May 2017 523.25 -1 -0.19%

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