A huge increase in the estimate of Canada’s canola crop hardly pushed futures lower as a big rally in soy oil offset the downward price pressure.
Statistics Canada’s producer survey today pegged the canola crop at 17.23 million tonnes, up about three million from the September survey and up five percent from last year.
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Most in the trade had expected a crop of around 15.5 million and no one in the pre report survey by Commodity News Service had a number higher than 16.2 million.
However, the market reaction was muted, with offsetting upward pressure from strong canola exports and domestic crush as well as rising soy oil prices.
January canola on Friday closed at $474.20 per tonne, down $1.10 and March closed at $483, unchanged.
For the week, January gained $11.10 or 2.4 percent and March rose $12.06 or 2.7 percent
The weekly canola crush was 170,935 tonnes, up 5.4 percent from the week before. The year to date total is 2.66 million tonnes, up about 150,000 over last year same time.
Canola exports in week 17 ending Nov. 29 were 240,300 tonnes, bringing the total to 3.234 million tonnes, up 341,200 tonnes from the same point last year, according to Canada Grain Commission bulk export figures.
Chicago soy oil closed up almost four percent higher on talk that a U.S. biodiesel tax credit could be implemented for producers instead of blenders. That was seen as positive for demand.
Soy oil also enjoyed technical support.
Vegetable oils are also supported by concern that the El Nino will trim palm oil production from Indonesia and Malaysia.
The stronger vegetable oil prices and a weak Canadian dollar have pushed Canadian crush margins higher, making it more profitable to process canola.
Soybean futures rose for the fifth day in a row, breaking through the $9 a bushel barrier on a round of short-covering as well as spillover gains from a rally in soy oil.
For the week, soybeans rose 3.8 percent, their biggest weekly rally since the week ended July 3. Soy oil futures were up 10.5 percent this week while soy meal gained 0.2 percent.
Statistics Canada’s wheat production number was at the high end of traders’ expectations but wheat prices rose nevertheless.
Chicago wheat climbed on short covering, sparked by a sharp drop in the U.S. dollar on Thursday. Funds had a heavy net short position and that was beginning to look risky.
Chicago March wheat climbed 1.2 percent today while Minneapolis was up 0.68 percent and Kansas City was up 0.84 percent.
For the week, CBOT March wheat rose 5-1/2 cents per bushel or 1.1 percent. Kansas City March wheat rose 14 cents or three percent and MGEX March spring what rose nine cents or 1.8 percent.
Rain at harvest has downgraded quality in wheat crops in southern Brazil and Argentina, raising the possibility of Brazil increasing wheat imports from North America for blending.
On a price-negative note, Ukraine got moisture recently, which will help its drought stressed wheat crop.
Corn futures climbed on a technical follow through from Thursday’s gains, sparked by the lower U.S. dollar.
Corn for the week gained about 3.9 percent, its biggest advance in nearly three months.
The United States Department of Agriculture on Dec. 9 will issue its monthly supply and demand report.
Analysts expect a Brazilian soybean crop of between 98 million tonnes and 101 million. Argentina’s crop is expected at 56 million to 57.5 million.
Reuters reports that crops in the European Union are going into winter in good shape following good crop weather through the fall.
Light crude oil nearby futures in New York were down $1.11 to US$39.97 per barrel.
The Canadian dollar at noon was US74.82 cents, up from 74.66 cents the previous trading day. The U.S. dollar at noon was C$1.3365.
In afternoon trade, major U.S. stock indexes are up strongly with the Dow and Nasdaq up more than two percent. The Toronto market is up only about 0.2 percent with the weaker oil price weighing on the market as well as poor job creation.
Job growth in the U.S. met expectations on November but Canada lost jobs last month.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2016 474.20 -1.10 -0.23%
Canola Mar 2016 483.00 unch 0.00%
Canola May 2016 491.40 +1.60 +0.33%
Canola Jul 2016 497.40 +3.10 +0.63%
Canola Nov 2016 489.50 +9.40 +1.96%
Milling Wheat Dec 2015 238.00 +1.00 +0.42%
Milling Wheat Mar 2016 240.00 +1.00 +0.42%
Milling Wheat May 2016 243.00 +1.00 +0.41%
Durum Wheat Dec 2015 300.00 -20.00 -6.25%
Durum Wheat Mar 2016 305.00 -20.00 -6.15%
Durum Wheat May 2016 315.00 -20.00 -5.97%
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 906 +8.5 +0.95%
Soybeans Mar 2016 908 +7.75 +0.86%
Soybeans May 2016 914 +7.75 +0.86%
Soybeans Jul 2016 920.5 +7.5 +0.82%
Soybeans Aug 2016 922 +7.5 +0.82%
Soybeans Sep 2016 920.5 +7 +0.77%
Soybean Meal Dec 2015 285.1 -2 -0.70%
Soybean Meal Jan 2016 284.9 -2.5 -0.87%
Soybean Meal Mar 2016 286.9 -2.5 -0.86%
Soybean Oil Dec 2015 31.8 +1.21 +3.96%
Soybean Oil Jan 2016 32.08 +1.21 +3.92%
Soybean Oil Mar 2016 32.26 +1.16 +3.73%
Corn Dec 2015 376.25 +6 +1.62%
Corn Mar 2016 381.5 +4.5 +1.19%
Corn May 2016 387.25 +4.5 +1.18%
Corn Jul 2016 392.75 +4.75 +1.22%
Corn Sep 2016 396.25 +4.5 +1.15%
Oats Dec 2015 260.5 -4.5 -1.70%
Oats Mar 2016 241 +1.25 +0.52%
Oats May 2016 237 +1.5 +0.64%
Oats Jul 2016 236.5 +1 +0.42%
Oats Sep 2016 238.25 +4.75 +2.03%
Wheat Dec 2015 471.25 +6.5 +1.40%
Wheat Mar 2016 484.5 +5.75 +1.20%
Wheat May 2016 491.25 +5.25 +1.08%
Wheat Jul 2016 497.5 +4.75 +0.96%
Wheat Sep 2016 507.25 +4.25 +0.84%
Minneapolis
Spring Wheat Dec 2015 528.25 +6.25 +1.20%
Spring Wheat Mar 2016 515.5 +3.5 +0.68%
Spring Wheat May 2016 523.25 +4 +0.77%
Spring Wheat Jul 2016 531.75 +4 +0.76%
Spring Wheat Sep 2016 541.75 +3.5 +0.65%
Kansas City
Hard Red Wheat Dec 2015 463.5 +4.75 +1.04%
Hard Red Wheat Mar 2016 480.5 +4 +0.84%
Hard Red Wheat May 2016 491.25 +4 +0.82%
Hard Red Wheat Jul 2016 501.5 +4.25 +0.85%
Hard Red Wheat Sep 2016 515.5 +4.25 +0.83%
