Canola again advances on strength in wheat

Wheat was again the leader in crop markets Thursday, gaining on continued concern about the size of crops in the former Soviet Union and Europe.Also, strong weekly American wheat exports supported the market.This rising tide lifted canola, which had no new developments of its own to trade on.Moscow’s Institute for Agricultural Market Studies lowered its forecast for wheat exports in 2010-11 to 9.5 million tonnes. That was less than the SovEcon’s Wednesday forecast of 11 million tonnes.The International Grains Council’s monthly report today lowered its forecast of wheat production by 13 million tonnes to 651 million tonnes against a demand forecast of 655 million tonnes.Stocks at the end of 2010-11 were projected at 192 million tonnes, down from a previous estimate of 201 million. That would mean stocks would shrink from the 197 million tonnes estimated for the end of the current crop year. The IGC numbers are similar to the U.S. Department of Agriculture’s July forecast.Production decreases in Canada, the former Soviet Union and Europe were partly made up by increases in U.S. and Australian production. The rally in wheat spilled over into corn and oilseeds.Soybeans saw additional support from dryness in the Mississippi Delta region as soybeans start to fill pods.Wheat advanced despite evidence that the United States will produce a large spring wheat crop.The U.S. spring wheat average yield will be 46 bushels per acre, down from 46.2 bu. last year, according to a forecast today from the U.S. Wheat Quality Council, which sponsored an analysts’ tour of the northern plains this week.The spring wheat yield outlook is larger than the average in a poll taken by Reuters News Service.The tour projected durum yield will be 38.4 bu. per acre, up from last year’s 36.2 bu.Reuters’s pool forecast was 44 bu.The Saskatchewan crop report said drier, warm weather advanced crops, but development is still one to two weeks behind normal.Seventy-one percent of canola is rated as fair to good condition. At the same time last year, 86 percent of canola was rated fair to good.In Winnipeg Thursday, November canola rose $4.70 per tonne to $455.70 on 6,004 trades.The January contract rose $3.90 to $457.30 on 1,285 trades.The previous day’s best basis was $5 per tonne under the November contract in the par region, according to the Winnipeg ICE Futures daily report.The 14-day Relative Strength Index for November was 71 according to BarChart.com. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.The Canadian dollar at noon was 96.43 cents US, down from 96.55 the previous trading day. The U.S. dollar at noon was $1.037 Cdn. Weekly new claims for U.S. unemployment benefits were down slightly, by 11,000 to 457,000, but they will have to fall further, to the 400,000-450,000 range, to indicate sustainable job growth.Winnipeg October barley rose $2.60 to $159.10 and December also rose $2.60 to $159.10.Chicago August soybeans rose 16.25 cent to $10.2675 US per bushel. September rose 7.75 cents to $9.9275. New crop November rose 10 cents to $9.88.September oats rose 4.5 cents to $2.615 per bu. December oats rose 5.25 cents to $2.745 per bu. In New York, crude oil for September delivery rose 1.37 cents to $78.36 per barrel.

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