Canola closed a little higher Tuesday, buoyed by rising soybeans as new government economic stimulus in China raised the hope that the Asian giant will buy more soybeans.
November canola closed at $611.20 per tonne, up $1.70.
Stronger gains early in the morning were pared by shifts in currency and by the rapid progress of the U.S. harvest.
• China, the world’s leading soybean importer, through its central bank injected the equivalent of $42.2 billion into its money market today, raising hopes that Beijing might do even more to try to boost lagging growth. However, a report by the International Monetary Fund said the global economic slowdown is worsening and warned that the problems will linger if Europe and the United States do not act to fix their economic challenges.
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U.S. grains: Soy drops on demand worries, corn firm as traders question lofty yield projections
U.S. soybean futures fell to a 1-1/2 week low on Tuesday as China continued to shun purchases from the United States and as forecasts for improved rains in the coming days reinforced expectations for a sizeable Midwest harvest.
Grains were generally up modestly as traders balance their positions in advance of the USDA supply and demand report on Thursday. It will have the latest estimates of U.S. and world crops and updates on demand.
Traders have heard anecdotal reports of stronger than expected yields in U.S. soybeans and it will be interesting to see if the USDA report reflects this.
Also, many believe USDA might reduce its outlook for the Australian and Russian wheat crops to reflect dry weather.
The average in a Reuters poll of 26 analysts pegged the U.S. corn crop at 10.601 billion bushels, down 126 million bu, or 1.2 percent, from USDA’s September outlook.
The yield estimate actually increased, but analysts believe USDA will reduce the harvested acreage estimate to reflect the larger than normal number of fields that were abandoned because of the drought.
Analysts also pegged corn ending stocks for 2012-13 at 648 million bu, down 85 million, or 11.6 percent, from USDA’s September outlook. It would represent the tightest supply since the 1995-96.
The average estimate for the U.S. soybean crop was 2.759 billion bu., up from the USDA’s September report forecast of 2.634 billion bu.
The Reuters poll put the soybean yield at 37.006 bu. per acre, up 4.8 percent from a month ago.
• Leading palm producers Indonesia and Malaysia, are discussing the potential to form a joint body to manage supply and reduce stocks which have built up as production increases and demand dips in China and the European Union because of financial problems.
• Australia’s weather bureau says the warming of the Pacific that leads to El Nino appears to have suddenly stopped, and so expectations for an El Nino will have to be scaled back.
El Ninos tend to bring wet weather to South America and analysts had forecasted that the moisture would help the region produce a bumper soybean crop this year.
The bureau told Reuters the sudden stop in the warming is “one of the more unusual events that anyone of us has seen.”
However, the bureau said that another weather maker, the Indian Ocean Dipole, persists and is contributing to dry conditions in eastern Australia.
Dry weather is already limiting the wheat crop in Western Australia and parts of the east are also dry. The dryness in the east is expected to continue for the rest of 2013 and could keep the wheat crop under stress.
Winnipeg (per tonne)
Canola Nov 12 $611.20, up $1.70 +0.28%
Canola Jan 13 $610.30, up $2.10 +0.35%
Canola Mar 13 $606.30, up $2.20 +0.36%
Canola May 13 $599.00, up $4.80 +0.81%
Milling Wheat Oct 12 $290.50, up $0.70 +0.24%
Milling Wheat Dec 12 $295.70, up $0.70 +0.24%
Milling Wheat Mar 13 $305.20, up $0.70 +0.23%
Durum Wheat Oct 12 $308.30s -$0.70 -0.23%
Durum Wheat Dec 12 $312.80s -$0.70 -0.22%
Durum Wheat Mar 13 $319.40s -$0.70 -0.22%
Barley Oct 12 $245.00, unchanged
Barley Dec 12 $250.00, unchanged
Barley Mar 13 $253.00, unchanged
Chicago (per bushel)
Soybeans (P) Nov 12 $15.50, down 1. 0 -0.06%
Soybeans (P) Jan 13 $15.4925, up 1.25 +0.08%
Soybeans (P) Mar 13 $15.0425, up 2.25 +0.15%
Soybeans (P) May 13 $14.515, up 2.0 +0.14%
Corn (P) Dec 12 $7.42, unchanged
Corn (P) Mar 13 $7.4225, up 0.25 +0.03%
Corn (P) May 13 $7.365, up 0.25 +0.03%
Oats (P) Dec 12 $3.78, up 7.5 +2.02%
Oats (P) Mar 13 $3.825, up 7.5 +2.00%
Oats (P) May 13 $3.8325, up 7.25 +1.93%
Minneapolis (per bushel)
Spring Wheat Dec 12 $9.28, up 3.5 +0.38%
Spring Wheat Mar 13 $9.3525, up 4.0 +0.43%
Spring Wheat May 13 $9.405, up 3.75 +0.40%
Spring Wheat Jul 13 $9.365, up 1.5 +0.16%
The Bank of Canada noon rate for the loonie is $1.0217 US, down slightly from the previous day’s 1.0243.
The U.S. greenback is 97.88 cents Cdn.
Nearby crude oil in New York rose $3.06 to $92.39 per barrel.
The Toronto Stock Exchange’s S&P/TSX composite index closed down 145.42 points, or 1.17 percent, at 12,273.57.
The Dow Jones industrial average fell 110.12 points, or 0.81 percent, to 13,473.53 at the close.
The S&P 500 fell 14.40 points, or 0.99 percent, to 1,441.48. The Nasdaq Composite also fell 47.33 points, or 1.52 percent, to close at 3,065.02.
