Corn jumps on bargain buying, pulls up canola

The recent decline in crop prices brought out the bargain buyers Thursday and big gains in corn supported other crops, including canola.

However, by the close the gains in canola were scaled back.

May canola closed at $614.80 per tonne, up $1.40.

November closed at $570.70, up $1.50.

Talk that China and other buyers might have purchased U.S. corn lifted the nearby May contract up about three percent.

Stronger than expected weekly U.S. soybean sales also supported prices.

However, the soybeans gave back some of the gains late as traders liquidated long outright positions and long soybean-short corn spreads.

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Canola continues to be supported by good domestic and export demand. Also, various analysts are cutting their forecasts for European rapeseed production. Oil World puts the EU crop at 600,000 tonnes less than last year and last year was a disappointing crop.

It has been raining in Germany and France the past couple of days and that will likely stop the continuation of the damage for now. Frost, dry weather and disease have taken a toll on European rapeseed.

This past year, while Europe took little Canadian canola, it soaked up supply from the former Soviet countries and Australia, allowing Canada a mostly free hand in other markets.

• Statistics Canada releases the results of its planned seeding grower survey on Tuesday.

• Frost is expected this weekend in the northern U.S. Midwest but only minor crop damage is expected.

The area affected by this frost and earlier ones is soft wheat country. Soft wheat conditions in Illinois and Indiana did fall back slightly in the latest weekly crop condition report, but the hard red winter wheat crop grown in Kansas, Nebraska and Texas continued to improve and is in excellent shape.

• The debt auction held today in Spain went well but there are new concerns that bond rating agencies might put France’s rating on review for lowering in the autumn.

Also U.S. weekly claims for unemployment benefits were above expectations. USDA’s latest estimate is 45 million tonnes

• Argentina’s government today cut its production estimate for the country’s 2011-12 soybean production to 42.9 million tonnes, from 44 million previously. Argentina cut its forecast for the domestic corn harvest by 900,000 tonnes to 20.3 million tonnes.

Winnipeg (per tonne)

Canola May 12 $614.80, up $1.40 +0.23%

Canola Jul 12 $607.70, up $0.10 +0.02%

Canola Nov 12 $570.70, up $1.50 +0.26%

Canola Jan 13 $575.00, up $1.10 +0.19%

The best basis for the previous day in the par region was +$2.40 over the May contract, said ICE Futures Canada.

The 14-day relative strength index was 57.

Western Barley May 12 $235.00, unchanged

Western Barley Jul 12 $235.00, unchanged

Milling Wheat Oct 12 $258.00, down 1.00 -0.39%

Milling Wheat Dec 12 $263.00, down 1.00 -0.38%

Milling Wheat Mar 13 $273.00, down 1.00 -0.36%

Durum Wheat Oct 12 $277.50, unchanged

Durum Wheat Dec 12 $282.00, unchanged

Durum Wheat Mar 13 $288.60, unchanged

Barley Oct 12 $186.50, unchanged

Barley Dec 12 $190.00, unchanged

Barley Mar 13 $191.50, unchanged

Chicago (per bushel)

Soybeans May 12 $14.1575, up 8.0 cents +0.57%

Soybeans Jul 12 $14.21, up 7-4 +0.53%

Soybeans Nov 12 $13.425, up 4.75 +0.36%

Corn May 12 $6.21, up 19.2 +3.20%

Corn Jul 12 $612, up 18.0 +3.03%

Corn Dec 12 $5.4175, up 13.0 +2.46%

Oats May 12 3.2275 up 2.0 +0.62%

Oats Jul 12 $3.2575, up 3.0 +0.93%

Oats Dec 12 3.355, up 1.25 +0.37%

Minneapolis (per bushel)

Spring Wheat May 12 $8.0925, up 9.25 +1.16%

Spring Wheat Jul 12 $8.12, up 9.0 +1.12%

Spring Wheat Sep 12 $8.02, up 11.25 +1.42%

Spring Wheat Dec 12 $7.995, up 12.5 +1.59%

The nearby New York light sweet crude contract fell 40 cents to $102.27 US.

The Canadian dollar at noon was $1.0074 US, down from $1.0099 the previous trading day. The U.S. dollar at noon was 99.27 Cdn.

In unofficial early tallies:

The Toronto Stock Exchange’s S&P/TSX composite index closed up 24.80 points, or 0.20 percent, at 12,153.69.

The Dow Jones industrial average fell 69.63 points, or 0.53 percent, to close at 12963.12.

The S&P 500 Index dropped 8.28 points, or 0.60 percent, to 1,376.86.

The Nasdaq Composite lost 23.89 points, or 0.79 percent, to 3,007.56.

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