Crop futures mixed, canola falls

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Published: May 12, 2011

It was another volatile day of trading in commodities that left canola down when the market closed Thursday.

Canola moved into positive territory late for a short time, supported by rising soybeans and crude oil, but the July contract settled at $560 per tonne, down $5.30. The May contract expires this week.

Canola and spring wheat were pressured by improving seeding weather and forecasts for dry weather for the coming seven days. As of May 9 Saskatchewan’s farmers had seeded five percent of the crop, the province’s agriculture department said today. The greatest progress was made in the southwest. Only one percent is seeded in the east-central, northeast and northwest parts of the province.

Soybeans rallied on stronger crude oil.

Corn rallied on rumours of China buying and on bargain hunter buying.

Wheat fell on follow through from Wednesday’s bearish USDA report which did not cut the winter wheat crop as much as expected. Also, drier weather forecasts for the Prairies also pressured wheat.

Some analysts note that the USDA report was based on conditions as of May 1 and since then the situation in the hard red winter wheat area has deteriorated further. A key to final production will be how many acres get ploughed down. Farmers might decide to reseed to corn rather than harvest a poor wheat crop.

Also soft red winter wheat is suffering from excess moisture in the Midwest.

Europe’s rapeseed crop remains under pressure from lack of rain. Oil World believes the German crop will fall to 4.9 million tonnes from 5.75 million last year.

Commodities generally were under pressure after China today again raised banks’ reserve requirements, heightening speculation that slower growth will curb raw materials demand.

Winnipeg (per tonne)

Canola May 11        $551.00, down $5.30

Canola Jul 11         $560.00, down $5.30

Canola Nov 11        $559.00, down $1.30

Canola Jan 12        $566.80, down 70 cents

The previous day’s best basis was $18 under the July contract according to ICE Futures Canada in Winnipeg.

The May contract’s 14-day Relative Strength Index was 45. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market

Western Barley May 11        $200        unchanged

Chicago (per bushel)

Soybeans May 11        $13.4525, up 11.75 cents

Soybeans Jul 11          $13.4275, up 11.0

Soybeans Nov 11        $13.2625, up 5.25

Corn May 11        $6.80, up 11.25

Corn Dec 11        $6.295, up 3.5

Oats May 11        $3.47, up 10.0

Oats Dec 11         $3.61, up 4.0

Minneapolis (per bushel)

Spring Wheat May 11        $9.1925, down 17.75 cents

Spring Wheat Jul 11           $9.0475, down 20.75

Spring Wheat Dec 11        $9.205, down 19.75

Light crude oil nearby futures in New York rose 76 cents to $98.97 US per barrel.

The Canadian dollar at noon was $1.0354 US, down from $1.0436 the previous trading day. The U.S. dollar at noon was 96.58 cents Cdn.

The Toronto Stock Exchange composite index closed down 30.32 points, or 0.23 percent, at 13,389.42.

The Standard and Poor’s 500 index closed up 5.56 points, or 0.41 percent, at 1,347.64.

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