Canola edges lower on increased farmer deliveries, weak U.S. soybean exports

Canola closed lower on Thursday for the first time in several days, facing pressure from an uptick in producer deliveries and lower soybean futures.

Soybeans and corn fell on smaller than expected weekly U.S. exports.

November canola closed at $617, down $5.60. January closed at $616.70, down $5.40.

• A Bloomberg story says Japan is shifting oilseed demand to canola from high priced soybeans. For calendar year 2012 purchases are expected to reach a record 2.4 million tonnes, surpassing the previous record of 2.3 million set in 2010.

Canadian Grain Commission export statistics for crop year 2012-13 are so far available only for August.

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In the first month of the crop year, Japan imported 182,100 tonnes of canola, up from 164,600 in the same month last year.

• Wheat today dipped on profit taking after solid gains Wednesday that were fueled by word that Ukraine will stop exporting as of Nov. 15.

However, weekly U.S. wheat exports, after trailing expectations for several weeks, were above expectations today. This supports speculation that as Black Sea exporters run out of grain to sell, importers will have to turn to North America.

• Bloomberg reported on Wednesday that strong demand for European wheat to replace Black Sea product is driving its price above North American values. Bloomberg said French grain for March delivery trades at a premium of 39 cents a bushel over Chicago futures. In July there was 78 discount for French wheat.

Shipping costs still make U.S. wheat more expensive for a buyer such as Egypt, but the gap is narrowing.

• CWB today released updated Pool Return Outlooks for 2012-13.

For the harvest pool, durum values are $5 to $10 per tonne higher and wheat values are $8 per tonne higher to $2 per tonne lower compared to mid-September. Malting barley is up $35 per tonne while canola is unchanged from the last outlook issued mid-September. Early Delivery Pool projected returns for durum are unchanged to $5 per tonne higher, wheat values are $6 per tonne higher to $4 per tonne lower, and malting barley is $32 per tonne higher.

• The CWB had this to say about barley: Western Canadian malting barley quality results have been disappointing, tightening malt barley availability further and putting upward pressure on North American malting barley values in particular.

Domestic barley prices also continue to be supported by the tight North American feed grain supply-demand situation.

Australian barley production is expected to be lower than last year on account of drier growing conditions, with crop quality being the main factor yet to be determined concerning the Australian crop.

The Early Delivery and Harvest pools are both less than 10 percent priced.

• The price of corn, soymeal and most animal feed has been supported by stronger than expected demand from livestock feeders. Feeders are losing money and culling was expected to reduce demand for feedstuffs. But USDA quarterly stocks data last month showed feed demand had held up well.

But today Reuters reports that Sterling Smith of Citigroup notes the number of eggs placed in incubators for broiler production last week fell to the lowest level since 2001. There were 177 million eggs in incubators, down four percent from last year at the same time.

Broiler chickens eat a lot of soymeal

Winnipeg ICE (per tonne)

Canola Nov 12 $617.00, down $5.60 -0.90%

Canola Jan 13 $616.70, down $5.40 -0.87%

Canola Mar 13 $614.80, down $5.10 -0.82%

Canola May 13 $610.30, down $3.50 -0.57%

Milling Wheat Dec 12 $308.50, down $1.40 -0.45%

Milling Wheat Mar 13 $318.00, down $1.40 -0.44%

Milling Wheat May 13 $321.00, down $1.40 -0.43%

Durum Wheat Dec 12 $312.40, unchanged

Durum Wheat Mar 13 $319.00, unchanged

Durum Wheat May 13 $323.00, unchanged