Canola eked out small gains Wednesday on a Statistics Canada report that pegged the canola crop smaller than expected.
But other crop futures fell as worries about the health of the global economy again rose to the fore.
American crop markets opened higher on worries about the deteriorating condition of corn, soybeans and spring wheat, but then fell as spooked investors took profits after several days of gains.
Statistics Canada forecast the canola crop at 13.193 million tonnes, near the bottom of the range of analyst’s pre-report estimates.
The crop would be a record, but because the forecast is a little below expectations November canola closed at $562.10 per tonne, up $2.80.
Last week, Reuters polled 20 traders and analysts about Canadian crops. The range of forecasts for canola was 12.9 to 14.8 million tonnes with an average of 13.6 million. Last year, the crop was 11.87 million.
StatsCan pegged the harvested canola area at 17.8 million acres with a strong Prairie-average yield of 32.3 bushels per acre.
Of course the crop is behind, especially in Alberta, and the frost risk will grow in September.
Wheat futures fell partly due to the StatsCan report but also on difficulty in breaking through technical resistance and on the downturn in outside markets.
StatsCan’s all wheat forecast was 24.076 million tonnes. That is more than the average of analysts’ forecasts for all wheat at 23.5 million tonnes. Last year’s crop was 23.167 million.
The StatsCan spring wheat forecast was 17.365 million tonnes, down from last year’s 17.485 million. Reuters did not poll analysts on spring wheat production.
The Canadian Wheat Board will release the August Pool Return Outlook Thursday and it will give its production estimates at its end of the crop year news conference on Friday.
StatsCan’s estimates for durum, barley and oats were within expectations. The flax estimate was smaller than pre-report guesses.
Also on Friday a U.S. crop tour sponsored by ProFarmer magazine will release its forecast for corn and soybean production.
In economic news Moody’s credit rating agency lowered its rating for Japan, a monthly read of German business confidence fell, Canada’s consumer confidence rating also fell, but the gloom was partly offset by a report on new orders for long lasting U.S. manufactured goods like cars and airplanes showed orders rose in July.
Winnipeg (per tonne)
Canola Nov 11 $562.10, up $2.80
Canola Jan 12 $570.80, up $3.10
Canola Mar 12 $578.90, up $3.10
Canola May 12 $585.70, up $3.40
The previous day’s best basis was $10.00 under the November contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 55. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Oct 11 $201, unchanged
Chicago (per bushel)
Soybeans Sep 11 $13.865, down 3.0 cents
Soybeans Nov 11 $13.935, down 3.75
Soybeans Jan 12 $14.0375, down 2.75
Corn Sep 11 $7.3175, up 1.5
Corn Dec 11 $7.43, down 0.5
Oats Sep 11 $3.60252, down 4.25
Oats Dec 11 $3.6825, down 4.75
Minneapolis (per bushel)
Spring Wheat Sep 11 $9.26, down 24.25 cents
Spring Wheat Dec 11 $9.125, down 22.0
Spring Wheat Mar 12 $9.1725, down 17.25
Light crude oil nearby futures in New York fell 28 cents at $85.16 US per barrel.
The Canadian dollar at noon was $1.0121 US, little changed from $1.0125 the previous trading day. The U.S. dollar at noon was 98.80 cents Cdn.
The Toronto Stock Exchange composite index in a preliminary tally closed up 5.48 points or 0.04 percent at 12,343.81.
The Standard & Poor’s 500 Index unofficially closed up 15.19 points, or 1.31 percent, at 1,177.54.
Gold fell on expectation that a speech by Federal Reserve chief Ben Bernanke on Friday will not reveal major initiatives.
