Canola flat, wheat up

Thursday was a flat day in the canola markets after initial uppiness faded early in the trading day.

Both canola and soybean futures prices were basically unchanged on the close, with slightly stronger meal prices balancing out slightly weaker vegetable oil prices.

But it was a bullish day in the wheat markets, with all three main wheat classes rising about 20 cents per bushel. The gains were strongest in soft red winter wheat and hard red winter wheat, which have been devastated by this summer’s Midwest U.S. drought. Some contracts gained 24 cents, but Minneapolis hard red spring wheat futures also rose about 19 cents. The narrowing of the spread between spring wheat and winter wheat is a continuing story, and another chapter was written Thursday.

The world’s oilseed markets continue to balance extremely tight U.S. soybean, soybean meal and soybean oil stocks with good Canadian canola production and adequate stocks of vegetable oils overseas.

Nothing Thursday changed the fundamental picture.

The wheat rally Thursday was seen by traders as a profit-taking situation by shorts who had gained much in the previous days’ selloffs, rather than any manifestation of a markedly different supply and demand situation.

In contrast to the tepid crop markets, the world equity markets roared. European Central Bank president Mario Draghi’s statement that his bond-buying moneybag is deep and has no set limit to the amount of risky government debt he can buy made traders around the world not only relieved about the short-term situation but also more confident about the medium-term situation.

Many saw Draghi’s statement and program as proof that the financial crisis will be able to be kicked much further down the road than many expected, and the combination of U.S. and European debt market manipulation could avert future financial crises and bring back good times. Thursday traders embraced a European version of the “Don’t fight the fed” attitude.

After all, some traders thought, what could be better to solve a debt crisis brought on by absurdly mispriced assets than a whole bunch of new debt produced and then purchased by the same governments in an attempt to manipulate the world’s economies by inflating asset values?

Winnipeg (per tonne)

Canola Nov 12    $640.00, down $1.00    -0.16%

Canola Jan 13    $643.80, down $0.90    -0.14%

Canola Mar 13    $644.90, down $1.20    -0.19%

Canola May 13    $633.50, down $0.50    -0.08%

Milling Wheat Oct 12    $294.00, unchanged

Milling Wheat Dec 12    $301.50, unchanged

Milling Wheat Mar 13    $311.00, unchanged

Durum Wheat Oct 12    $305.40, up $4.80     +1.60%

Durum Wheat Dec 12    $309.90, up $4.80     +1.57%

Durum Wheat Mar 13    $316.50, up $4.80     +1.54%

Barley Oct 12    $264.50, unchanged

Barley Dec 12    $269.50, unchanged

Barley Mar 13    $272.50, unchanged

Chicago (per bushel)

Soybeans (P) Sep 12    $17.4450, down 3.50 cents    -0.20%

Soybeans (P) Nov 12    $17.4700, down 0.50    -0.03%

Soybeans (P) Jan 13    $17.4575, down 0.50    -0.03%

Soybeans (P) Mar 13    $16.9125, down 3.25    -0.19%

Corn (P) Sep 12    $7.9725, up 7.50    +0.95%

Corn (P) Dec 12    $7.9850, up 7.75    +0.98%

Corn (P) Mar 13    $8.0150, up 6.75    +0.85%

Oats (P) Sep 12    $3.8600, up 5.00    +1.31%

Oats (P) Dec 12    $3.9100, up 4.00    +1.03%

Oats (P) Mar 13    $3.9125, up 5.50    +1.43%

Minneapolis (per bushel)

Spring Wheat Sep 12    $9.2925, up 15.75 cents    +1.72%

Spring Wheat Dec 12    $9.4950, up 19.75     +2.12%

Spring Wheat Mar 13    $9.5900, up 19.50     +2.08%

Spring Wheat May 13    $9.6500, up 18.50     +1.95%

The previous day’s best canola basis was $20.79 under the November contract according to ICE Futures Canada in Winnipeg.

Light crude oil nearby futures in New York rose 17 cents at $95.53 US per barrel.

The Canadian dollar at noon was $1.0178 US, up from $1.0099 the previous trading day. The U.S. dollar at noon was 98.25 cents Cdn.

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