Canola futures dip but weather remains a threat

Canola was up and down on Thursday, with the July contract settling down $1.10 per tonne at $459.50.

New crop November closed down $4.60 at $458.60.

Lack of farmer delivers lent some support to the old crop price.

Basis levels vary widely across the Prairies. Some of the better basis levels are in Manitoba where there are several crushers vying for supply.

Saskatchewan Agriculture today said 78 percent of the crop was in the ground with the most advanced area in the southwest at 85 percent and the least advanced in the east central area at 67 percent.

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Alberta harvest just ahead of average pace

The harvesting of all crops in Alberta reached 42 per cent complete as of Sept. 9, compared to the five-year average of 40 per cent. The provincial agriculture department noted combing was highlighted by little or no rain.

The report said 76 percent of intended canola areas are in the ground.

Seeding progress is about equal to the five-year average but is late based on the longer-term norm. Eastern Saskatchewan and western Manitoba are having the most difficulties because of rain.

Snow was falling in the Peace River region this morning and a large part of central Alberta could see temperatures falling to the freezing point tonight or Friday morning, raising the danger of frost.

Moisture in most parts of the Canadian Prairies is good.

Europe expects a record rapeseed crop this year thanks to favourable weather. Production could climb to 21.8 million tonnes from 20.9 million last year.

Soybeans fell on weaker cash prices and that weighed on soy oil and soy meal. Corn fell on generally good crop conditions in the Midwest.

Old and new crop Minneapolis spring wheat and old crop Kansas City wheat edged higher on Thursday but Chicago soft wheat was down.

Heavy rain is expected over large parts of Kansas, Oklahoma and Missouri over the next few days and that could damage hard red wheat quality, but will offer welcome relief for pasture and it will be good for crops where accumulations are less extreme.

Winter wheat also got support from Informa Economics that today pegged U.S. winter wheat at 1.396 billion bushels. USDA’s May estimate was s 1.403 billion bu. Informa put the hard red winter wheat crop at 744 million bu. The USDA’s figure is 746 million.

The U.S. Weather Service today increased its forecast for an El Nino to develop by this summer to 70 percent. The chance for it to develop by the fall is 80 percent.

El Ninos tend to bring dry weather to the eastern part of Australia, but crops so far are off to a good start. The Australian Bureau of Meteorology shows rain accumulation from March 1 until now has been near normal, but May precipitation in the east was disappointing while in the west was average to above average.

Another lesser-known ocean system linked to weather, the Indian Ocean Dipole, is also being watched. If it moves into a positive phase, it could combine with the effects of the El Nino to increase the potential for drought in India.

The Australian Bureau of Meteorology this week said the dipole is currently neutral and will likely remain so through the next few months but could shift to positive by September-October.

Check out today’s Western Producer for these market stories: • China poised for bumper crop. Demand for wheat imports will likely be down.

• The debate over China’s ability to continue to meet most of its grain needs continues. But Lester Brown, a long time analyst of China’s agricultural and environmental issues thinks it is only a matter of time before they will have to regularly import large amounts of corn.

• There is positive outlook for green lentil prices.

• The Chicago oats futures contract was disconnected from the Canadian cash market because of the transportation problems, but it did reflect the local demand in Chicago and Minneapolis.

• Mexico is opening its market to fresh potatoes from the U.S. The development could also open opportunities for Canada potatoes.

• Traders are comfortable that global wheat supplies will be ample, even with the reduced U.S. winter wheat crop.

• Plus our regular livestock market reports.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jul 2014 459.50 -1.10 -0.24%

Canola Nov 2014 458.60 -4.60 -0.99%

Canola Jan 2015 464.30 -4.80 -1.02%

Canola Mar 2015 467.00 -4.50 -0.95%

Canola May 2015 469.00 -4.30 -0.91%

Milling Wheat Jul 2014 204.00 unch 0.00%

Milling Wheat Oct 2014 205.00 unch 0.00%

Milling Wheat Dec 2014 209.00 +1.00 +0.48%

Durum Wheat Jul 2014 251.00 unch 0.00%

Durum Wheat Oct 2014 242.00 unch 0.00%

Durum Wheat Dec 2014 244.00 unch 0.00%

Barley Jul 2014 145.00 unch 0.00%

Barley Oct 2014 145.00 unch 0.00%

Barley Dec 2014 147.00 unch 0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago

Soybeans Jul 2014 1460.5 -22 -1.48%

Soybeans Aug 2014 1400.25 -16.5 -1.16%

Soybeans Sep 2014 1259 -10.5 -0.83%

Soybeans Nov 2014 1210.5 -6.75 -0.55%

Soybeans Jan 2015 1217 -6.25 -0.51%

Soybeans Mar 2015 1222 -5.5 -0.45%

Soybean Meal Jul 2014 490.6 -5.9 -1.19%

Soybean Meal Aug 2014 463.6 -3.9 -0.83%

Soybean Meal Sep 2014 424.1 -1.3 -0.31%

Soybean Oil Jul 2014 38.69 -0.56 -1.43%

Soybean Oil Aug 2014 38.81 -0.55 -1.40%

Soybean Oil Sep 2014 38.84 -0.54 -1.37%

Corn Jul 2014 449 -7.25 -1.59%

Corn Sep 2014 444.25 -8 -1.77%

Corn Dec 2014 447.25 -6.25 -1.38%

Corn Mar 2015 456.75 -6.5 -1.40%

Corn May 2015 463.75 -5.75 -1.22%

Oats Jul 2014 356.25 -4.5 -1.25%

Oats Sep 2014 338.25 -2.5 -0.73%

Oats Dec 2014 327.75 unch 0.00%

Oats Mar 2015 319.5 -1 -0.31%

Oats May 2015 318 -1.25 -0.39%

Wheat Jul 2014 605.75 -8.75 -1.42%

Wheat Sep 2014 616.25 -8.75 -1.40%

Wheat Dec 2014 637 -9.5 -1.47%

Wheat Mar 2015 655 -9 -1.36%

Wheat May 2015 665 -8.75 -1.30%

Minneapolis

Spring Wheat Jul 2014 690.5 +1 +0.15%

Spring Wheat Sep 2014 698.75 +1 +0.14%

Spring Wheat Dec 2014 710.25 +1.25 +0.18%

Spring Wheat Mar 2015 718.75 +1.25 +0.17%

Spring Wheat May 2015 722.25 +0.25 +0.03%

Kansas City

KC HRW Wheat Jul 2014 714 +0.5 +0.07%

KC HRW Wheat Sep 2014 720 -0.5 -0.07%

KC HRW Wheat Dec 2014 731.25 -1 -0.14%

KC HRW Wheat Mar 2015 735.75 -1.75 -0.24%

KC HRW Wheat May 2015 734.75 -1.75 -0.24%

Light crude oil nearby futures in New York dropped 16 cents at $102.48 US per barrel.

The Canadian dollar at noon was 91.46 cents US, up from 91.43 cents the previous trading day. The U.S. dollar at noon was $1.0934 Cdn.

The European Central Bank cut rates to record lows and outlined other ways to pump money into the economy. The market awaits Friday’s U.S. employment report. Analysts expect the report will show slowing job growth.

The news weighed on energy and bank shares in Canada. The Toronto Stock Exchange’s S&P/TSX composite index closed up 3.39 points, or 0.02 percent, at 14,800.18.

However, the Dow and the S&P 500 set new record highs.

The Dow Jones industrial average rose 98.58 points or 0.59 percent, to 16,836.11.

The S&P 500 gained 12.57 points or 0.65 percent, to 1,940.45.

The Nasdaq Composite added 44.59 points or 1.05 percent, to 4,296.23.