Canola futures were hammered down three percent Thursday following Wednesday’s two percent decline.
The price effect of the transportation backlog is now bleeding big time into the futures price as well as the basis.
The canola market saw major technical weakness as the price dropped below $400 a tonne, triggering sell stops.
March closed at $394 or about $8.94 per bushel.
Relative to March soybeans, which traded at about $14.75 Cdn today, canola is hugely oversold. But the next technical support line is about $380.
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Speculators are said to be selling canola and buying soybeans.
Canola plummeted while soybeans, soy meal and soy oil rose.
News that China was still buying U.S. soybeans helped lift the March contract 1.61 percent. Weekly soybean sales were below expectations but traders took heart that China was still buying some U.S. supply despite the advancing Brazilian harvest.
Although rain in Brazil is expected today and Sunday, a drier forecast is taking hold for the rest of next week. The dryness could reduce the acreage of Brazil’s second soybean crop. In some places, Brazilian farmers seed a second crop after early seeded soybeans are harvested.
Wheat futures gained about one percent due mostly to technical signals. The Chicago wheat market could have trouble breaking through the 50-day moving average.
Corn was little changed.
The USDA released its annual trendline forecasts. These forecasts were done in late 2013 and don’t reflect market changes since then. They are based more on trend yields and long term price-acreage relationships.
Still, they garner some attention.
The base line projection said U.S. soybean area would rise to 78 million acres and the crop to 3.48 billion bushels.
After subtracting the demand projections it leaves U.S. soybean ending stocks still tight at 203 million bushels at the end of 2014-15, up from 150 million forecast for the end of the current year.
By comparison, the baseline projection for corn area for 2014-15 is 93.5 million acres, yield 165 bu. per acre and production at 14.260 billion bushels and ending stocks pegged at 2.607 billion.
Corn production in the 2013-14 marketing year was 13.925 billion bushels from 95.4 million acres with ending stocks of 1.481 billion bushels.
Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2014 394.00 -13.50 -3.31%
Canola May 2014 404.70 -13.00 -3.11%
Canola Jul 2014 414.20 -12.70 -2.97%
Canola Nov 2014 432.30 -11.70 -2.64%
Canola Jan 2015 439.80 -11.30 -2.50%
Milling Wheat Mar 2014 192.00 +2.00 1.05%
Milling Wheat May 2014 193.00 +3.00 1.58%
Milling Wheat Jul 2014 193.00 +3.00 1.58%
Durum Wheat Mar 2014 245.00 unch 0.00%
Durum Wheat May 2014 249.00 unch 0.00%
Durum Wheat Jul 2014 250.00 unch 0.00%
Barley Mar 2014 126.50 unch 0.00%
Barley May 2014 128.50 unch 0.00%
Barley Jul 2014 128.50 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 1344.25 +21.25 +1.61%
Soybeans May 2014 1330.5 +20.75 +1.58%
Soybeans Jul 2014 1312 +19.75 +1.53%
Soybeans Aug 2014 1262.75 +16.75 +1.34%
Soybeans Sep 2014 1182.25 +12 +1.03%
Soybeans Nov 2014 1133.75 +15 +1.34%
Soybean Meal Mar 2014 452.8 +9.3 +2.10%
Soybean Meal May 2014 432.7 +7.2 +1.69%
Soybean Meal Jul 2014 420 +6.5 +1.57%
Soybean Oil Mar 2014 39.54 +0.55 +1.41%
Soybean Oil May 2014 39.87 +0.57 +1.45%
Soybean Oil Jul 2014 40.17 +0.57 +1.44%
Corn Mar 2014 440.5 +0.5 +0.11%
Corn May 2014 446.5 +0.5 +0.11%
Corn Jul 2014 451 -0.5 -0.11%
Corn Sep 2014 452.25 -1.5 -0.33%
Corn Dec 2014 456.25 -1.5 -0.33%
Oats Mar 2014 410.75 -7.75 -1.85%
Oats May 2014 383.25 +5.75 +1.52%
Oats Jul 2014 343.75 +5 +1.48%
Oats Sep 2014 323.25 unch 0.00%
Oats Dec 2014 308.5 +3 +0.98%
Wheat Mar 2014 595.5 +8.5 +1.45%
Wheat May 2014 594 +7.75 +1.32%
Wheat Jul 2014 597.5 +6.75 +1.14%
Wheat Sep 2014 606.25 +6.75 +1.13%
Wheat Dec 2014 618.75 +6.75 +1.10%
Minneapolis
Spring Wheat Mar 2014 662.25 +7.5 +1.15%
Spring Wheat May 2014 645.5 +6.25 +0.98%
Spring Wheat Jul 2014 646.25 +7 +1.10%
Spring Wheat Sep 2014 652.75 +6.25 +0.97%
Spring Wheat Dec 2014 663.5 +5.75 +0.87%
Kansas City
KCBT Red Wheat Mar 2014 672.75 +9.75 +1.47%
KCBT Red Wheat May 2014 664.75 +7.75 +1.18%
KCBT Red Wheat Jul 2014 655.25 +7 +1.08%
KCBT Red Wheat Sep 2014 662.5 +6.5 +0.99%
KCBT Red Wheat Dec 2014 673.5 +7.5 +1.13%
Light crude oil nearby futures in New York dropped two cents at $100.35 US per barrel.
The Canadian dollar at noon was 91.07 cents US, up from 90.97 cents the previous trading day. The U.S. dollar at noon was $1.0980 Cdn.
The U.S. posted disappointing data on jobs and consumer spending, but investors were unfazed, chalking the weakness up to weather instead of fundamentals.
On the TSX composite, gains in shares of Barrick Gold Corp and Goldcorp Inc. helped overcome a wave of disappointing quarterly reports.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 101.16 points, or 0.73 percent, at 14,001.65.
The Dow Jones industrial average rose 63.32 points or 0.4 percent, to 16,027.26.
The S&P 500 gained 10.51 points or 0.58 percent, to 1,829.77.
The Nasdaq Composite added 39.384 points or 0.94 percent, to 4,240.672.
