Canola futures fell Tuesday on weaker competing oilseeds and vegetable oil and on commercial hedging pressure.
Canola fell despite an almost one cent decline in the value of the Canadian dollar. A weaker loonie should encourage export and domestic crusher demand.
The expectation of record large South American soybean crops maintained downward pressure on oilseeds.
Reuters reported funds now have a large net short position of roughly 40,000 March canola contracts.
Traders in a Reuters poll expect the U.S. Department of Agriculture will increase its forecast of global 2013-14 soybean ending stocks to 71.53 million tonnes on average, up from 70.62 million tonnes in the December report.
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U.S. grains: Soy futures top one-week high, US crop outlook limits gains
Chicago Board of Trade soybean futures hit their highest level in more than a week on Thursday as technical buying helped the market recover from a three-month low reached on Monday, analysts said.
Traders expect global corn stocks will be 163.20 million tonnes, up from 162.46 million in December.
Wheat stocks are forecast to dip to 182.57 million tonnes, down from 182.78 million in December, according to the Reuters poll.
Corn futures dipped Tuesday after two days of a modest rally. Traders adjusted positions ahead of the USDA reports due Friday.
In addition to the larger world corn stocks forecast, traders also expect USDA will increase its estimate of the domestic U.S. corn crop to 14.066 billion bushels, up from 13.989 billion in the November report.
The Reuters poll showed traders expect the domestic soybean crop to be 3.279 billion bu., up from USDA’s November report of 3.258 billion.
The corn market is underpinned by expectations that commodity index funds will buy corn over five sessions starting Wednesday as part of annual rebalancing, said Reuters.
Chicago wheat fell a few cents but Kansas was up about a penny and Minneapolis was mixed.
The market appears to be little concerned about the extreme cold that spread across much of the winter wheat growing regions of the U.S. The temperature was cold enough to damage dormant plants if they did not have a blanket of snow and if soil was dry, but wheat is resilient at this stage and most should survive. A late winter-early spring freeze would have a much bigger impact.
The loonie fell after the government reported that the November merchandise trade deficit was $940 million, much worse than the forecast deficit of $120 million. Statistics Canada also revised its October trade deficit down to $908 million from the original estimate of a surplus of $75 million.
In a CBC interview today Bank of Canada head Stephen Poloz said the bank would like keep its interest rate unchanged at the current low level until economic data showed the Canadian economy is gaining momentum.
Meanwhile, the U.S. reported its trade deficit shrank to the lowest level in four years at $34.3 billion from $49.3 billion in October.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2014 428.10 -5.10 -1.18%
Canola Mar 2014 437.00 -5.10 -1.15%
Canola May 2014 445.80 -4.90 -1.09%
Canola Jul 2014 453.80 -4.80 -1.05%
Canola Nov 2014 467.00 -4.80 -1.02%
Milling Wheat Mar 2014 183.00 unch 0.00%
Milling Wheat May 2014 190.00 -1.00 -0.52%
Milling Wheat Jul 2014 194.00 -1.00 -0.51%
Durum Wheat Mar 2014 242.00 unch 0.00%
Durum Wheat May 2014 246.00 unch 0.00%
Durum Wheat Jul 2014 247.00 unch 0.00%
Barley Mar 2014 146.00 unch 0.00%
Barley May 2014 148.00 unch 0.00%
Barley Jul 2014 148.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jan 2014 1299.5 +2.75 +0.21%
Soybeans Mar 2014 1276 -0.75 -0.06%
Soybeans May 2014 1258.75 -2.75 -0.22%
Soybeans Jul 2014 1247.5 -3.5 -0.28%
Soybeans Aug 2014 1216.75 -4.75 -0.39%
Soybeans Sep 2014 1158 -6 -0.52%
Soybean Meal Jan 2014 434.6 +5.8 +1.35%
Soybean Meal Mar 2014 415.8 +2 +0.48%
Soybean Meal May 2014 405.7 +0.4 +0.10%
Soybean Oil Jan 2014 37.7 -0.17 -0.45%
Soybean Oil Mar 2014 37.93 -0.19 -0.50%
Soybean Oil May 2014 38.26 -0.22 -0.57%
Corn Mar 2014 426 -1.75 -0.41%
Corn May 2014 433.75 -2 -0.46%
Corn Jul 2014 440.5 -2 -0.45%
Corn Sep 2014 446.75 -2 -0.45%
Corn Dec 2014 453.25 -2 -0.44%
Oats Mar 2014 363.5 +12.75 +3.64%
Oats May 2014 328.5 +5.25 +1.62%
Oats Jul 2014 316.75 +1.5 +0.48%
Oats Sep 2014 310.5 +1.5 +0.49%
Oats Dec 2014 303.5 +1 +0.33%
Wheat Mar 2014 602.5 -3.25 -0.54%
Wheat May 2014 607.75 -3.5 -0.57%
Wheat Jul 2014 611.5 -2.75 -0.45%
Wheat Sep 2014 621 -2.75 -0.44%
Wheat Dec 2014 634.5 -3.25 -0.51%
Minneapolis
Spring Wheat Mar 2014 630.75 +0.25 +0.04%
Spring Wheat May 2014 637.75 -2.25 -0.35%
Spring Wheat Jul 2014 647.25 -3.25 -0.50%
Spring Wheat Sep 2014 656.25 -2.75 -0.42%
Spring Wheat Dec 2014 671 -2.25 -0.33%
Kansas City
KCBT Red Wheat Mar 2014 645.25 +1.25 +0.19%
KCBT Red Wheat May 2014 646 +0.5 +0.08%
KCBT Red Wheat Jul 2014 644.75 +0.25 +0.04%
KCBT Red Wheat Sep 2014 656.5 unch 0.00%
KCBT Red Wheat Dec 2014 669.25 -0.25 -0.04%
Light crude oil nearby futures in New York rose 24 cents at $93.67 US per barrel.
The Canadian dollar at noon was 93.09 cents US, down from 93.82 cents the previous trading day. The U.S. dollar at noon was $1.0742 Cdn.
In early unofficial tallies —
The TSX composite rallied on energy stocks and bullish comments from drug maker Valeant, climbing 101.39 points or 0.75 percent to 13,596.93.
U.S. markets were also up with the Dow climbing about 0.7 percent, the S&P 500 up about 0.66 percent and the Nasdaq up about 1.03 percent.
