Canola futures rally, as more soy oil goes to biodiesel

Canola futures rose more than one percent Tuesday with support from a two percent rise in soy oil.

Crop markets were generally up for a second day, propelled in part by Monday’s news from the U.S. Environmental Protection Agency regarding biofuel mandates.

The new mandates are higher than a preliminary proposal issued in May but less than the original targets set out by the U.S. Congress in 2007.

The potential for increased use of soy oil in biodiesel helped soy oil futures jump 2.2 percent on Tuesday.

The rise in the oil component helped lift soybeans and the rally was supported when prices for the January contract broke through the high end of its 20-day Bollinger range for the first time since Oct. 15, Reuters reported.

Canola markets were also supported by a weaker Canadian dollar and a revised production outlook from Australia.

Canola production Down Under is now forecast at 2.99 million tonnes, down from the previous forecast of 3.15 million tonnes, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said Monday.

Likely all of Australia’s exports will go to the European Union this year, leaving the China market to Canada.

January canola closed at $471.30 per tonne, up $5.10 or just over one percent.

Chicago wheat futures fell, with the two front months posting contract lows on weak export demand and improving U.S. crop conditions, traders told Reuters.

Chicago has fallen for five straight sessions.

However, Minneapolis spring wheat was mixed today, with firm domestic cash values supporting the nearby December contract.

USDA in its last weekly crop progress report of 2015, released on Monday, rated 55 percent of the U.S. winter wheat crop as good to excellent, up from 53 percent a week earlier and above trade expectations, Reuters reported.

The market shrugged at news that ABARES lowered its Australian wheat production forecast to 23.98 million tonnes, down from 25.28 million previously.

Corn futures edged higher, reaching the highest levels in about three weeks on technical buying and expectations for better U.S. demand tied to the EPA’s new ethanol blending mandate. However, regulatory data released late on Monday showed speculative investors last week extended their net short, or bearish position, in corn futures to 150,291 contracts, the largest short since June.

Argentina’s farmers are racing to plant more corn now a new farm-friendly government is taking power, increasing the area planted by 10 percent or more over previous estimates, and making more exports likely from one of the world’s biggest suppliers.

Farmers now have a six-week window in key growing regions to plant corn before mid-January and they are rushing to buy seed and fertilizer, Reuters reported.

Extra output, combined with the new president Mauricio Macri’s promise of a more competitive exchange rate, will likely boost Argentinian exports.

Light crude oil nearby futures in New York were up 20 cents to US$41.85. per barrel.

The Canadian dollar at noon was US74.78 cents, down from 75.00 cents the previous trading day. The U.S. dollar at noon was C$1.3372.

Stronger than expected earnings at two of Canada’s major banks helped lift the Toronto Stock Exchange composite index 166.23 points, or 1.23 percent, to 13,636.06.

The Dow Jones industrial average rose 168.43 points, or 0.95 percent, to 17,888.35, the S&P 500 gained 22.22 points, or 1.07 percent, to 2,102.63 and the Nasdaq Composite added 47.64 points, or 0.93 percent, to 5,156.31.

The main economic report this week will be the U,S, November employment report on Friday, which is expected to show that the economy added 200,000 jobs during the month. Analysts say a strong report virtually guarantees a Federal Reserve rate rise this month.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jan 2016 471.30 +5.10 +1.09%

Canola Mar 2016 480.10 +6.10 +1.29%

Canola May 2016 485.90 +6.10 +1.27%

Canola Jul 2016 490.00 +5.50 +1.14%

Canola Nov 2016 478.50 +2.80 +0.59%

Milling Wheat Dec 2015 235.00 unch 0.00%

Milling Wheat Mar 2016 237.00 unch 0.00%

Milling Wheat May 2016 240.00 unch 0.00%

Durum Wheat Dec 2015 320.00 unch 0.00%

Durum Wheat Mar 2016 325.00 unch 0.00%

Durum Wheat May 2016 335.00 unch 0.00%

Barley Dec 2015 189.00 unch 0.00%

Barley Mar 2016 191.00 unch 0.00%

Barley May 2016 197.00 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 2016 889.25 +8.25 +0.94%

Soybeans Mar 2016 891.5 +8.25 +0.93%

Soybeans May 2016 897.5 +8 +0.90%

Soybeans Jul 2016 903.5 +8.25 +0.92%

Soybeans Aug 2016 905 +8 +0.89%

Soybeans Sep 2016 904 +8 +0.89%

Soybean Meal Dec 2015 285.7 +1.1 +0.39%

Soybean Meal Jan 2016 286.4 +1.1 +0.39%

Soybean Meal Mar 2016 288.6 +1.1 +0.38%

Soybean Oil Dec 2015 29.78 +0.68 +2.34%

Soybean Oil Jan 2016 30.08 +0.66 +2.24%

Soybean Oil Mar 2016 30.34 +0.67 +2.26%

Corn Dec 2015 367 +2 +0.55%

Corn Mar 2016 373.75 +1.5 +0.40%

Corn May 2016 379.25 +1.25 +0.33%

Corn Jul 2016 384.5 +0.75 +0.20%

Corn Sep 2016 388.25 +1 +0.26%

Oats Dec 2015 257.5 +8.75 +3.52%

Oats Mar 2016 236.75 +4.25 +1.83%

Oats May 2016 232.75 +3.5 +1.53%

Oats Jul 2016 232.25 +1.75 +0.76%

Oats Sep 2016 233.75 -0.25 -0.11%

Wheat Dec 2015 456.5 -3.5 -0.76%

Wheat Mar 2016 471.5 -4 -0.84%

Wheat May 2016 479.25 -4.75 -0.98%

Wheat Jul 2016 486.75 -6 -1.22%

Wheat Sep 2016 497.75 -6.5 -1.29%

Minneapolis

Spring Wheat Dec 2015 526.25 +3 +0.57%

Spring Wheat Mar 2016 507.5 -0.25 -0.05%

Spring Wheat May 2016 514.5 -0.5 -0.10%

Spring Wheat Jul 2016 523.25 -0.5 -0.10%

Spring Wheat Sep 2016 533.5 unch 0.00%

Kansas City

Hard Red Wheat Dec 2015 451.5 -5.5 -1.20%

Hard Red Wheat Mar 2016 469 -3.75 -0.79%

Hard Red Wheat May 2016 480 -3.75 -0.78%

Hard Red Wheat Jul 2016 491 -4.25 -0.86%

Hard Red Wheat Sep 2016 505 -4.25 -0.83%

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