Canola edges higher on good demand, stronger soybeans

Oilseeds edged higher again Wednesday as the market tries to ensure enough soybeans are planted in the U.S. to make up for the smaller crop in South America.

Steady demand and worries about tight year end stocks also supported canola. The current rate of farmer selling is not large enough to cover canola demand.

May canola closed at $587.70 per tonne, up 90 cents

November closed at $549.20, up 50 cents

Soybean futures rose as the market tries to buy acres for spring planting.

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The upside was limited by unseasonably warm temperatures that could lead to an early jump on seeding. In Western Canada there is a welcome forecast for light rain this weekend and on Monday.

• In the U.S. the warm weather is generating talk about early seeding, which is usually beneficial for yield prospects.

That hurt corn prices, but they remain well supported. Analyst Dan Basse of AgResource believes old crop corn could rise to around $6.80-$7.20 per bu. Many believe China will again buy before the end of the crop year.

New crop is also supported by worries about supply. The International Grains Council believes demand will again outpace corn production in 2012-13. The IGC forecasts production at 880 million tonnes and consumption at 884 million.

In the current crop year it forecasts consumption at 871 million tonnes and production at 864 million.

• A Rabobank analysis suggests that the historical rate of U.S. corn yield gain can’t be sustained as the geographic area of corn production expands west into non-ideal areas. Also, yields will suffer from corn-snow-corn rotations and the rate of technical innovation appears to be slowing.

Winnipeg (per tonne)

Canola May 12 $587.70, up $0.90 +0.15%

Canola Jul 12 $587.90, up $0.30 +0.05%

Canola Nov 12 $549.20, up $0.50 +0.09%

Canola Jan 13 $552.60, up $0.20 +0.04%

The previous day’s best canola basis was $7.45 over the May contract, according to ICE Futures Canada in Winnipeg.

The 14-day relative strength index was 83.

Western Barley May 12 $224.00, unchanged

Western Barley Jul 12 $227.00, unchanged

Milling Wht Oct 12 $260.50, unchanged

Milling Wht Dec 12 $265.50, unchanged

Milling Wht Mar 13 $270.50, unchanged

Durum Wht Oct 12 $265.50, unchanged

Durum Wht Dec 12 $270.00, unchanged

Durum Wht Mar 13 $276.60, unchanged

Barley Oct 12 $185.00, unchanged

Barley Dec 12 $188.50, unchanged

Barley Mar 13 $190.00, unchanged

Chicago (per bushel)

Soybeans May 12 $13.5025, up 1.5 cents +0.11%

Soybeans Jul 12 $13565, up 2.0 +0.15%

Soybeans Jan 13 $13.12, up 0.25 +0.02%

Corn May 12 $6.5875, down 3.25 -0.49%

Corn Jul 12 $6.5675, down 1.25 -0.19%

Corn Mar 13 $5.7425, down 1.0 -0.17%

Oats May 12 $3.1125, up 3.75 +1.22%

Oats Jul 12 $2.995 , up 4.5 +1.53%

Oats Mar 13 $3.1725, down 0.75 -0.24%

Minneapolis (per bushel)

Spring Wht May 12 $8.065, down 4.5 cents -0.55%

Spring Wht Jul 12 $8.05, down 3.0 -0.37%

Spring Wht Mar 13 $8.015, down 3.0 -0.37%

The nearby New York light sweet crude contract fell $1.28 to $105.43.

The Canadian dollar at noon was $1.0086 US, down from $1.0096 the previous trading day. The U.S. dollar at noon was 99.15 cents Cdn.

In an early tally, the Toronto Stock Exchange’s S&P/TSX composite index closes down 159.79 points, or 1.27 percent, at 12,377.90. Gold company shares were down after the U.S. Federal Reserve indicated yesterday that it would not ease monetary policy further.

The Dow Jones industrial average edged up 17.25 points, or 0.13 percent, to 13,194.93 and the Standard & Poor’s 500 Index fell 1.65 points, or 0.12 percent, to 1,394.30. The Nasdaq Composite Index climbed 0.85 points, or 0.03 percent, to 3,040.73.