Canola futures rose Wednesday as the U.S. drought continues to drive all grain prices higher.
U.S. markets were closed for their Independence Day holiday so trade was light.
Temperatures across the Midwest and into the Central Plains are in the mid to upper 30s C.
July canola closed at $648.30, up $9.30 (+1.46%)
November closed at $604.30, up $3.10 (+0.52%)
January closed at $607.40, up $2.30 (+0.38%)
The Bank of Canada noon rate for the Canadian dollar is 98.74 cents US, nearly steady with 98.78 the previous day.
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The U.S. dollar is $1.0128 Cdn.
• Disappointing economic data from Europe today supported expectations that the European Central Bank will cut interest rates to a record low on Thursday to stimulate the economy.
• India, which has record large wheat stocks in poorly protected government storage areas, has decided to allow two million tonnes of wheat exports.
The Indian government until now has been reluctant to sell the wheat because it was purchased at a high price and the government would have to subsidize the sale to compete with lower priced grain from the Black Sea region.
The sale will hardly make a dent in the 50 million tonnes owned by the government, of which about 19 million tonnes is not well protected and in danger of spoilage.
• SovEcon has lowered its estimate of Russia’s wheat crop to 48.5 million tonnes from its June 20 estimate of 50-51 million. Last year the country produced about 56 million tonnes of wheat.
• Oil World this week said a big Canadian crop will more than make up for reduced production in Europe and Ukraine, but the shortage of soybeans will keep canola prices supported.
It pegged global 2012-13 rapeseed/canola crop at 61.6 million tonnes, up 600,000 from its last outlook and up from 59.59 million tonnes produced last year.
Oil World sees global demand in 2012-13 of 61.2 million tonnes so year-end stocks will rise slightly.
Oil World expects Canada will harvest 16.20 million tonnes, up from 14.50 million tonnes last season.
That helps to make up for the European Union crop that was pegged at 18 million tonnes, down from 19.17 million last season and Ukraine’s crop of 950,000 million tonnes, down 1.37 million last year.
Oil World notes that soybean prices have been rising more quickly than canola, giving the latter a price advantage.
That should lead to good demand for canola, with Chinese buying expected to be particularly strong into December.
Winnipeg (per tonne)
Canola Jul 12 $648.30, up 9.30 +1.46%
Canola Nov 12 $604.30, up 3.10 +0.52%
Canola Jan 13 $607.40, up 2.30 +0.38%
Canola Mar 13 $607.30, up 2.90 +0.48%
The basis report from ICE Futures Canada said the best cash bid in the par region on July 3 was $652.93.
The 14-day relative strength index for November canola is 69. The RSI for November soybeans is 73 and is getting into technically oversold territory.
Western Barley Jul 12 $237.00, unchanged
Western Barley Oct 12 $221.00, up $4.00 +1.84%
Milling Wheat Oct 12 $284.70, up $2.00 +0.71%
Milling Wheat Dec 12 $292.00, up $2.00 +0.69%
Milling Wheat Mar 13 $302.00, up $2.00 +0.67%
Durum Wheat Oct 12 $276.50, up $1.00 +0.36%
Durum Wheat Dec 12 $281.00, up $1.00 +0.36%
Durum Wheat Mar 13 $287.60, up $1.00 +0.35%
Barley Oct 12 $201.00, unchanged
Barley Dec 12 $203.70, unchanged
Chicago and Minneapolis markets were closed.
Brent crude oil fell close to one percent on worries about European economic performance.
In an early tally, the Toronto Stock Exchange S&P/TSX composite index rose 65.12 points, or 0.55 percent, to close at 11,913.87.
U.S. stock markets were closed.
