Canola futures are up Thursday morning, pulled higher by a bullish USDA report that surprised the market by keeping demand higher than expected.
At 10:05 a.m. CST November canola is trading at about $617.80 per tonne, up $10.40 or 1.7 percent and the highest since Sept. 25.
December corn is at $7.7125 per bushel, up 4.7 percent and November soybeans are at $15.61 up 2.5 percent.
The biggest mover today is corn. USDA pegged the U.S. crop at 10.706 billion bushels, above the average analyst estimate of 10.601 billion. It estimated the yield at 122 bu. per acre, below the average guess of 122.884 bu. per acre.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
However, it left the harvested acreage number unchanged.
Many analysts had assumed it would drop the acreage estimate to account for many abandoned fields due to drought.
That leaves the door open to further reductions in later USDA reports.
USDA said corn ending stocks for 2012-13 would fall to 619 million bu., below trade estimates for 648 million.
It got to that number by trimming the 2011-12 ending stocks number from the September report and keeping domestic demand steady although it trimmed its corn export number slightly.
Traders had expected an increased soybean production estimate to account for the positive effect of rain late in the growing season.
USDA estimated it at 2.860 billion bu., even more than the trade’s guess of 2.764 billion.
Soybean stocks were pegged at 130 million, below expectations for 134 million.
USDA also brought out a U.S. canola production forecast showing the crop has bounced back strongly from the small crop last year when excess moisture plagued production.
It pegged the U.S. crop at 1.127 million tonnes, up from 697,630 tonnes last year.
Wheat was supported by a small decreased to U.S. ending stocks. Production was little changed from the last report but the domestic feed use number increased leading to the 1.2 million tonne cut in U.S. stocks.
Also it juggled its world wheat production numbers, lowering global production to 653.05 million tonnes, down about 5.7 million tonnes.
The biggest change was a three million tonne reduction of the Australian crop to 23 million tonnes.
World ending stocks were lowered to 173 million from the September forecast of 176.71.
Stocks at the end of 2011-12 were 198.17 million tonnes.
