While it’s getting too wet in parts of the Prairies, hot, dry weather in the Midwest and declining crop conditions there drove corn and soybean prices sharply higher Tuesday.
The rising tide also lifted canola, although a stronger loonie limited the gain. Strong crusher demand and fund buying also supported canola.
July canola closed at $621.20 per tonne, up $13.80
November closed at $581.50, up $12.60.
• Rain in June appears to be heaviest in west-central Saskatchewan, the Saskatchewan-Manitoba border, the area around Hudson Bay, Sask. and east of Dauphin, Man. The foothills of Rockies in Alberta also have been drenched.
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Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
• On Monday after the markets closed the USDA said 63 percent of corn was rated good to excellent, down from 66 percent a week earlier. Analysts expected a two percentage point drop
Soy stood at 56 percent good to excellent, down four percentage points from last week and two percentage points worse than the average of analyst estimates.
It also said five percent of corn had reached the silking stage critical in setting yield. Hot, dry weather at this time will damage yield.
The USDA crop condition reports showed winter and spring wheat improved from the week before.
Forecasters said it would remain dry in the southern half of the corn and soybean belt for the next two weeks. Northern areas such as the Dakotas and Minnesota would continue to get rain.
• November soybeans “gapped” higher on the open, that is the contract’s low was above the previous day’s high. That is considered a strong technical sign.
• Reuters reports that Russian grain analyst SovEcon has cut its forecast for the country’s grain crop by 4.5 percent.
It sees the wheat crop down by 5.7 percent from previous estimates and said the outlook could be reduced further due to damage from winter freezing and a dry spring.
It pegged the total grain harvest at 85 million tonnes, down from 94 million tonnes last year.
It lowered wheat to 50 million tonnes, down from 56 million in last year.
USDA’s current forecast for Russian wheat production is 56 million tonnes.
• Australia’s Bureau of Meteorology said climate model indicate a transition to an El Nino weather pattern by September-October. El Nino tends to generate good rain in South America.
That would be good for what are expected to be larger soy seeded areas in South American this fall.
Oil World today forecast Argentine farmers are likely to plant 48.43 million acres of soybeans for harvesting in early 2013, up from 45.79 million this year.
Brazil’s area is likely to climb to 65.24 million acres, up from 61.88 million this year.
• Outside markets were up on hope that the declining economic situation will force central bankers to adopt new stimulus measures.
Winnipeg (per tonne)
Canola Jul 12 $621.20, up $13.80 +2.27%
Canola Nov 12 $581.50, up $12.60 +2.21%
Canola Jan 13 $585.00, up $11.90 +2.08%
Canola Mar 13 $588.20, up $11.20 +1.94%
The best basis in the par region the previous day was $14 over the July contract, said ICE Futures Canada.
The 14-day relative strength index was 58.
Western Barley Jul 12 $237.00, unchanged
Western Barley Oct 12 $208.00, $2.00 -0.95%
Milling Wheat Oct 12 $252.70, unchanged
Milling Wheat Dec 12 $260.00, unchanged
Milling Wheat Mar 13 $269.00, unchanged
Durum Wheat Oct 12 $275.50, unchanged
Durum Wheat Dec 12 $280.00, unchanged
Durum Wheat Mar 13 $286.60, unchanged
Barley Oct 12 $183.00, unchanged
Barley Dec 12 $185.70, unchanged
Barley Mar 13 $188.70, unchanged
Chicago (per bushel)
Soybeans (P) Jul 12 $14.3375, up 49.5 cents +3.58%
Soybeans (P) Aug 12 $14.2125, up 51.0 +3.72%
Soybeans (P) Sep 12 $13.98, up 47.5 +3.52%
Soybeans (P) Nov 12 $13.845, up 45.25 +3.38%
Corn (P) Jul 12 $6.125, up 13.0 +2.17%
Corn (P) Sep 12 $5675, up 30.5 +5.68%
Corn (P) Dec 12 $5.635, up 29.5 +5.52%
Oats (P) Jul 12 $3.245, up 8.5 +2.69%
Oats (P) Sep 12 $3.0675, up 7.75 +2.59%
Oats (P) Dec 12 $2.9425, up 7.25 +2.53%
Minneapolis (per bushel)
Spring Wheat Jul 12 $7.985, down 4.0 cents -0.50%
Spring Wheat Sep 12 $7.645, up 12.25 +1.63%
Spring Wheat Dec 12 $7.70, up 10.75 +1.42%
Nearby light crude in New York rose 76 cents to close at $84.03 per barrel.
The Bank of Canada noon rate for the loonie was 98.25 cents US, up strongly from 97.41 the previous day.
The U.S. dollar was 1.0178 Cdn.
In early tallies:
Toronto Stock Exchange S&P/TSX composite index closed up 187.23 points, or 1.61 percent, at 11,788.36.
The Dow Jones industrial average was up 147.88 points, or 1.16 percent, at 12,889.70.
The Standard & Poor’s 500 Index was up 17.46 points, or 1.30 percent, at 1,362.24.
The Nasdaq Composite Index was up 42.24 points, or 1.46 percent, at 2,937.57.
