March canola edged up Friday on short covering, allowing the contract to post a small weekly gain.
U.S. corn and wheat markets were slightly lower today pressured by forecast for rain early next week in Argentina. The moisture should end the strain that this week’s heat has put on corn and soybean crops in Argentina.
March canola closed at $431.10, up $2.30. November closed at $463.30, up $3.
For the week March canola rose $1.30 per tonne.
New crop November gained 2.20 on the week.
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Pulse Weekly: Most lentil prices lower as focus changes to new crop
Lentil prices on the Canadian Prairies eased back during the week ended July 28, said Levon Sargsyan, broker with Johnston’s Grain. Sargsyan noted that’s due to the recent rains that brought relief to some of the dry areas of the region.
U.S. markets will be closed Monday for Martin Luther King Day, but the Winnipeg market will be open.
Canola today was supported by a modest technical induced rise in soybeans but soy oil fell slightly. Canola is underpriced relative to other oilseeds, but the logistics problems in getting more canola to the West Coast for export are keeping a lid on prices.
• Until the weather problems this December, rail movement postharvest was pretty good compared to the five year average but the demand for hopper cars far exceeds the railways’ ability or interest in supplying.
David Przednowek, pooling manager with the CWB at Crop Production Week in Saskatoon today said Canadian grain companies have about 40,000 rail cars on the open order book. That means the companies have ordered about 40,000 cars that the railways have not been able to supply. A few years ago, 5,000 open orders would have been considered a huge problem, he said.
The grain companies have contracted with foreign buyers and ships are arriving at the West Coast (Vancouver and Prince Rupert) to load at port terminals, but the terminals don’t have the grain to load so the ships are waiting.
Przednowek thinks there will be 40 ships next week at the West Coast waiting to load grain. Only 18 ships can wait in English Bay so other anchorages at Vancouver Island and elsewhere are being used. Luckily, demurrage costs are vastly lower than what they were a few years ago when vessel charter costs were sky high due to China’s voracious demand for commodities. Now there are more ships and China’s demand is down, meaning vessel costs per day are a fraction of what they were.
The Canadian dollar continued to fall Friday, dropping another 0.35 of a cent versus the U.S. buck.
• The Canadian Oilseed Processors Association said members crushed 135,556 tonnes of canola in the week ending Jan. 15, up 1.2 percent from week before.
That represented 77.5 percent of capacity.
To date, COPA members have crushed 3.089 million tonnes, down from 3.318 million at the same time last year.
Corn fell. Rain next week should help the pollinating corn crop in Argentina. Temperatures highs have been around 40C this week stressing the crop but the rain should end that. Argentina is the world’s second largest corn exporter.
• Informa Economics shaved its outlook for 2014 U.S. soybean seeded area and increased its outlook for corn acreage.
It sees corn area at 93.319 million acres, up from 91.486 million.
Soy acres should total 81.264 million, down from 81.929 in its last outlook. However that would still be a record high and well up over 2013’s by six percent over last year and well above the previous record of 77.451 million acres set in 2009.
• Wheat dropped another few cents today.
Reuters reported that for the week, the benchmark Chicago Board of Trade March soft red winter wheat contract slid 1.1 percent. Minneapolis March spring wheat dipped 0.4 percent and Kansas City March hard red winter wheat dropped 0.6 percent during the week.
Chicago wheat has fallen 14.1 percent during its string of seven straight losing weeks.
2014-15 OUTLOOK
The expectation of a record large U.S. soybean seedings and a record large South American soybean crop puts a large risk over 2014-15 oilseed prices. The November canola price today, as low as it is, might look pretty good a few months from now.
Neil Townsend, director of market research for CWB, at CWB Day at Crop Production Week today, had a very bearish outlook for 2014-15.
He said the huge carry over from the record Canadian crop would depress new crop prices. The Canadian market will get no help from international factors.
There is no significant weather problem anywhere yet in crops that are in the ground in South America, or winter seeded crops in the U.S., Black Sea region, India or China.
Brazil’s growing conditions support the expectation of a bumper soy and corn crops. Argentina’s growing regions have had a few worries, but rain seems to arrive just in time to prevent serious crop trouble.
The cold snap early this month in the U.S. likely did not damage the winter wheat crop there.
There is a risk in Ukraine from warm weather that has melted the snow insulating the winter wheat crop there. That exposes it to danger if the weather turns intensely cold in the next few weeks. But once February arrives the likelihood of very cold weather recedes in that region, Townsend said.
Additional negative pressure already in the market and likely to continue into 2014-15 is the pull out of large investment funds from commodities and into equities, he added.
Most commodities, from metals to energy to agricultural, all fell this past year while stock markets rose. The outlook is for the trend to continue so the billions of dollars of fund money that rolled into crop futures market the past few years, helping push them to new heights, is now rolling out, adding to the downward momentum.
Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2014 431.10 +2.20 +0.51%
Canola May 2014 440.40 +2.30 +0.52%
Canola Jul 2014 449.30 +2.40 +0.54%
Canola Nov 2014 463.30 +3.00 +0.65%
Canola Jan 2015 469.00 +3.10 +0.67%
Milling Wheat Mar 2014 182.00 -2.00 -1.09%
Milling Wheat May 2014 186.00 -2.00 -1.06%
Milling Wheat Jul 2014 188.00 -2.00 -1.05%
Durum Wheat Mar 2014 243.00 unch 0.00%
Durum Wheat May 2014 247.00 unch 0.00%
Durum Wheat Jul 2014 248.00 unch 0.00%
Barley Mar 2014 127.00 unch 0.00%
Barley May 2014 129.00 unch 0.00%
Barley Jul 2014 129.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Mar 2014 1316.5 +1.5 +0.11%
Soybeans May 2014 1297.25 +1 +0.08%
Soybeans Jul 2014 1282 +0.75 +0.06%
Soybeans Aug 2014 1241.25 unch 0.00%
Soybeans Sep 2014 1171.5 +1 +0.09%
Soybeans Nov 2014 1125 +2.75 +0.25%
Soybean Meal Mar 2014 434.5 +2.5 +0.58%
Soybean Meal May 2014 420.7 +2.6 +0.62%
Soybean Meal Jul 2014 411.9 +1.9 +0.46%
Soybean Oil Mar 2014 37.74 -0.31 -0.81%
Soybean Oil May 2014 38.06 -0.32 -0.83%
Soybean Oil Jul 2014 38.43 -0.32 -0.83%
Corn Mar 2014 424 -4 -0.93%
Corn May 2014 431.75 -3.75 -0.86%
Corn Jul 2014 438.5 -3.25 -0.74%
Corn Sep 2014 443.25 -3.25 -0.73%
Corn Dec 2014 449 -3.25 -0.72%
Oats Mar 2014 399.5 -0.25 -0.06%
Oats May 2014 357.25 +3.25 +0.92%
Oats Jul 2014 326.5 +0.5 +0.15%
Oats Sep 2014 311 -0.5 -0.16%
Oats Dec 2014 298.25 -1.5 -0.50%
Wheat Mar 2014 563.5 -9.25 -1.62%
Wheat May 2014 570.5 -9.25 -1.60%
Wheat Jul 2014 577 -9.5 -1.62%
Wheat Sep 2014 585.75 -9.5 -1.60%
Wheat Dec 2014 598.5 -9.25 -1.52%
Minneapolis
Spring Wheat Mar 2014 617.75 -6.25 -1.00%
Spring Wheat May 2014 615 -7 -1.13%
Spring Wheat Jul 2014 622.5 -6.75 -1.07%
Spring Wheat Sep 2014 630 -6.5 -1.02%
Spring Wheat Dec 2014 642.75 -6.5 -1.00%
Kansas City
KCBT Red Wheat Mar 2014 623.25 -6.25 -0.99%
KCBT Red Wheat May 2014 621 -4.75 -0.76%
KCBT Red Wheat Jul 2014 617.5 -5 -0.80%
KCBT Red Wheat Sep 2014 628.75 -5.25 -0.83%
KCBT Red Wheat Dec 2014 642 -5.75 -0.89%
Light crude oil nearby futures in New York rose 41 cents at $94.37 US per barrel.
The Canadian dollar at noon was 91.23 cents US, down from 91.52 cents the previous trading day. The U.S. dollar at noon was $1.0961 Cdn.
In afternoon trade the TSX is up on stronger gold values while U.S. indexes are mixed at levels near their record highs.
Investors are weighing the mix of quarterly financial results. Some companies are showing good results while others are disappointments
