Oilseeds jumped more than 1.5 percent higher on Thursday after the USDA reported weekly sales that far exceeded the trade’s expectation.
Also, canola’s price is rising to ration tight old crop supplies and encourage acreage this spring.
Oats soared more than five percent as the market tries to catch up to fast rising oilseeds. If oats falls too far behind, acreage will switch out of the crop and into canola and there will be inadequate supply in 2012-13.
May canola closed at $598.90 per tonne, up $11.20.
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U.S. grains: Soybean futures set two-week high on US weather worry, soyoil rally
Chicago Board of Trade soybean futures touched a two-week high on Friday on worries that heat may threaten U.S. crops and expectations that the country’s biofuel policy would boost demand for soyoil, analysts said.
November closed at $557.60, up $8.40.
The basis deteriorated with a posting of 80 cents over May compared to the previous day’s $7.45 over, according to ICE Futures Canada.
• With canola climbing and wheat mostly stagnant the potential for canola area to easily top 20-21 million acres is increasing, but that number might not be considered a drag on price.
Jerry Klassen, manager of the Winnipeg office of GAP SA Grains and Produits, has said that with tight 2011-12 year end stocks and growing demand, there is demand for 21 million acres or more.
• The USDA data showed U.S. export sales of soybeans at 1,393,700 tonnes, above the range of estimates for 650,000 to 900,000 tonnes.
With a drought-reduced South American crop and port labour troubles in Argentina, buyers are shifting business to the United States.
• Wheat was supported by a big Iran purchase that included Canadian and U.S. wheat. Iran is believed to be suffering from drought.
Also, Russian analyst SovEcon said that while Russia’s overall wheat crop is still expected to be good, the production region closest to Black Sea ports suffered from the same drought and frost problems have reduced the crop in Ukraine.
SovEcon said it would be a strain on Russia’s rail network to pull grain from farther away to the Black Sea ports.
• Sinograin has stockpiled only 1.2 million tonnes of corn from last year’s harvest since December. Reuters said the information came from an industry website quoting a spokesperson from Sinograin, the manager of China’s state grain reserves. The volume was just over a tenth of the 11 million tonnes stockpiled as “temporary reserves” from the 2010 harvest, Reuters said.
The information supports views that China will be forced to import corn this year to replenish its reserves.
• New crop prices are limited by exceptionally warm weather in the U.S. Midwest and Plains with forecasts for showers thrown in for good measure. An early jump on seeding could increase the potential for strong yields.
• The inverse between the nearby old crop corn futures price and the new crop December contract has widened as traders look at increasingly tight projections for year-end stocks, but prospects for a huge 2012 crop acreage.
• Dealers believe EU rapeseed crops are generally developing well although drought warnings remained a concern in some areas, Reuters reported.
There is talk that European stocks are starting to get tight, leading to a potential for a scramble for supply until the new crop comes in.
It is dry in Great Britain, southern France and Spain, but there are reassuring reports about rapeseed crops in Germany and France, the European Union’s top two producers. The state of the crop in Poland, which might have suffered winter damage, is still not clear.
Winnipeg (per tonne)
Canola May 12 $598.90, up $11.20 +1.91%
Canola Jul 12 $598.50, up $10.60 +1.80%
Canola Nov 12 $557.60, up $8.40 +1.53%
Canola Jan 13 $561.60, up $9.00 +1.63%
The previous day’s best canola basis was 80 cents over the May contract, according to ICE Futures Canada in Winnipeg.
The 14-day relative strength index was not yet available.
Western Barley May 12 $224.00, unchanged
Western Barley Jul 12 $227.00, unchanged
Milling Wht Oct 12 $260.60, up $0.10 +0.04%
Milling Wht Dec 12 $265.60, up $0.10 +0.04%
Milling Wht Mar 13 $270.60, up $0.10 +0.04%
Durum Wht Oct 12 $265.50, unchanged
Durum Wht Dec 12 $270.00, unchanged
Durum Wht Mar 13 $276.60, unchanged
Barley Oct 12 $185.00, unchanged
Barley Dec 12 $188.50, unchanged
Barley Mar 13 $190.00, unchanged
Chicago (per bushel)
Soybeans May 12 $13.69, up 18.75 cents +1.39%
Soybeans Jul 12 $13.755, up 19.0 +1.40%
Soybeans Jan 13 $13.2625, up 14.25 +1.09%
Corn May 12 $6.69, up 10.25 +1.56%
Corn Jul 12 $6.67, up 10.25 +1.56%
Corn Mar 13 $5.815, up 7.25 +1.26%
Oats May 12 $3.2875, up 17.5 +5.62%
Oats Jul 12 $3.1825, up 17.0 +5.64%
Oats Mar 13 $3.1725, unchanged
Minneapolis (per bushel)
Spring Wheat May 12 $8.2025, up 13.75 cents +1.70%
Spring Wheat Jul 12 $8.185, up 13.5 +1.68%
Spring Wheat Mar 13 $8.12, up 10.5 +1.31%
The nearby New York light sweet crude contract fell 32 cents to $105.11.
The Canadian dollar at noon was $1.0072 US, down from $1.0086 the previous trading day. The U.S. dollar at noon was 99.29 cents Cdn.
In an early tally, the Toronto Stock Exchange’s S&P/TSX composite index closed up 77.92 points, or 0.63 percent, at 12,455.Can.
The Dow Jones industrial average rose 58.66 points, or 0.44 percent, to end unofficially at 13,252.76.
The S&P 500 Index gained 8.31 points, or 0.60 percent, to finish unofficially at 1,402.59, the first time it has climbed that high since June 5, 2008.
The Nasdaq Composite added 15.64 points, or 0.51 percent, to close unofficially at 3,056.37.
