By D’Arce McMillan
Saskatoon newsroom
Canola futures fell below $400 per tonne on Friday, pressured by advancing harvest in Canada and the United States and falling prices in the soybean complex.
It will be difficult for crop prices to break out of the downward spiral while harvest continues and while private and public forecasters in the United States and Europe continue to raise their production and yield forecasts.
November canola fell $16.20 per tonne on the week or 3.9 percent.
Western Canada’s weather is generally conducive to harvest but spotty showers and high humidity are proving a challenge in some areas.
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Saskatchewan Agriculture on Thursday said 23 percent of the province’s crop was in the bin as of Sept. 15 versus the five-year average of 43 percent. It was the worst showing since only 14 percent complete as of Sept. 13 in 2010.
Alberta Agriculture said that as of Sept. 16, 26 percent of crops had been harvested across the province , up from 19 percent the week before. The best progress was in the Peace region where almost half the crop was in the bin. In central and northern areas, progress was 20 percent or less. The south was about 24 percent done.
The forecast out into the middle of next week is fairly favourable for most of Western Canada with normal to above normal temperatures and little rain. The extended forecast indicates a stronger chance of rain toward the end of next week.
Now that canola has fallen below $400 there is an increasing possibility that we will test the price lows of what could be termed the modern grain price era. That is the period since the price spike of late 2007, early 2008, that was followed by the global economic collapse.
In the fall of 2009 into the early months of 2010 canola futures fell into a range around $375-$380, or about $8.50 per bushel, before taking off again in the summer of 2010, first on delayed seeding in Canada and the U.S. and then on severe drought in Russia and Kazakhstan.
Will we hit $375-$380? With continued good harvest weather in the U.S. it would not surprise me, but on the other hand soy oil appeared to stabilize this week, actually gaining almost one percent. Current soy oil supply in the U.S. is tight because of slowed crush pace while processors wait for new crop supply. However, I expect the oil shortage to be resolved as soon as a bit more U.S. crop is harvested and makes its way to crushers.
Generally, it was a down week in crop markets.
CBOT December wheat fell 28 cents per bushel or 5.6 percent, its third straight decline. Kansas City December wheat fell 33 cents or 5.6 percent. Minneapolis December spring wheat fell 42.5 cents or 7.4 percent.
Corn fell two percent, capping its fifth straight week without a gain.November soybeans in Chicago fell 2.9 percent over the week and soymeal 4.3 percent. October soyoil was 0.3 percent lower.
The Canadian Oilseed Processors Association said members crushed 143,556 tonnes of canola in the week ending Sept. 17, up 6.5 percent from the week before.
That represented a capacity use of about 82 percent.
Although it looks like CN Rail might be fined for failing to hit its target for moving grain, grain movement to port terminals since the start of the crop year Aug. 1 is averaging a little over one million tonnes a week, with the cumulative total at the end of week six at 6.288 million tonnes compared to 4.032 million last year at the same time.
Scotland voted to remain part of Great Britain.
On Friday, Alibaba, the China based e-commerce company, saw its shares close at $93.89, up 38 percent from its Initial Public Offering price of $68.The IPO was on track to raise about $25 billion, the most in history.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2014 397.50 -8.90 -2.19%
Canola Jan 2015 404.50 -8.30 -2.01%
Canola Mar 2015 411.70 -7.20 -1.72%
Canola May 2015 418.20 -5.90 -1.39%
Canola Jul 2015 423.70 -4.60 -1.07%
Milling Wheat Oct 2014 187.00 -4.00 -2.09%
Milling Wheat Dec 2014 194.00 -4.00 -2.02%
Milling Wheat Mar 2015 204.00 -3.00 -1.45%
Durum Wheat Oct 2014 303.20 unch 0.00%
Durum Wheat Dec 2014 309.70 unch 0.00%
Durum Wheat Mar 2015 310.70 unch 0.00%
Barley Oct 2014 123.50 unch 0.00%
Barley Dec 2014 125.50 unch 0.00%
Barley Mar 2015 126.50 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Nov 2014 957 -14.5 -1.49%
Soybeans Jan 2015 965.25 -14.25 -1.45%
Soybeans Mar 2015 972.75 -14.25 -1.44%
Soybeans May 2015 979.5 -14.75 -1.48%
Soybeans Jul 2015 985.5 -15 -1.50%
Soybeans Aug 2015 988.25 -14.5 -1.45%
Soybean Meal Oct 2014 324.1 -4.7 -1.43%
Soybean Meal Dec 2014 315.4 -4.9 -1.53%
Soybean Meal Jan 2015 312.9 -4.8 -1.51%
Soybean Oil Oct 2014 32.46 -0.26 -0.79%
Soybean Oil Dec 2014 32.58 -0.29 -0.88%
Soybean Oil Jan 2015 32.83 -0.29 -0.88%
Corn Dec 2014 331.5 -6.75 -2.00%
Corn Mar 2015 344.25 -6.5 -1.85%
Corn May 2015 353 -6.25 -1.74%
Corn Jul 2015 360 -6.25 -1.71%
Corn Sep 2015 367.5 -6.5 -1.74%
Oats Dec 2014 337.25 -5 -1.46%
Oats Mar 2015 323.75 -4.25 -1.30%
Oats May 2015 317.5 -3.75 -1.17%
Oats Jul 2015 313 -2.75 -0.87%
Oats Sep 2015 317.25 -4 -1.25%
Wheat Dec 2014 474.5 -14 -2.87%
Wheat Mar 2015 491 -14.75 -2.92%
Wheat May 2015 502.5 -14.75 -2.85%
Wheat Jul 2015 512 -14 -2.66%
Wheat Sep 2015 525 -13.25 -2.46%
Minneapolis
Spring Wheat Dec 2014 535.5 -14.75 -2.68%
Spring Wheat Mar 2015 552.75 -14.25 -2.51%
Spring Wheat May 2015 565.25 -13.75 -2.37%
Spring Wheat Jul 2015 577.5 -12.75 -2.16%
Spring Wheat Sep 2015 589.5 -10.75 -1.79%
Kansas City
Hard Red Wheat Dec 2014 560.25 -9.5 -1.67%
Hard Red Wheat Mar 2015 566 -11.25 -1.95%
Hard Red Wheat May 2015 569.5 -11.25 -1.94%
Hard Red Wheat Jul 2015 562.25 -11 -1.92%
Hard Red Wheat Sep 2015 574 -10.25 -1.75%
Light crude oil nearby futures in New York dropped 66 cents at $92.41 US per barrel.
The Canadian dollar at noon was 91.17 cents US, down from 91.36 cents the previous trading day. The U.S. dollar at noon was $1.0969 Cdn.
The TSX composite closed down 200.18 points or 1.29 percent at 15,265.35 based mostly on weaker crude oil values. Brent crude has fallen about eight percent since the start of August on thoughts that supplies are adequate.
The Dow Jones industrial average today rose 16.16 points, or 0.09 percent, to 17,282.15, the S&P 500 lost 0.8 points, or 0.04 percent, to 2,010.56 and the Nasdaq Composite dropped 13.64 points, or 0.3 percent, to 4,579.79.
For the week, the TSX composite fell 1.7 percent, the Dow rose 1.7 percent, the S&P rose 1.3 percent and the Nasdaq rose 0.3 percent.
