July canola futures settled above $500 a tonne on Tuesday for the first time since Dec. 21, supported by rising soybeans and soy oil.
Canola is also generally supported by the strong pace of exports and domestic crush, expectations of fairly tight carryout stocks and dry soils in large parts of the western Prairies.
On Monday an area on both sides of the Alberta-Saskatchewan border got rain and snow, providing needed moisture. That system provided some moisture to the Lethbridge area on Sunday.
Farmers told Statistics Canada that they intend to reduce canola acreage by 3.7 percent this year, but some analysts think that by the time the seeders are put away, canola acreage will be the same as last year.
The weekly condition report on the U.S. winter wheat crop improved and U.S. corn seeding is well ahead of normal progress.
So of course wheat and corn futures rose on Tuesday in part of a continuing round of events that has some scratching their heads.
U.S. crop markets rose on continued short covering, fund investment and a wet weather system that will put an end to the rapid seeding progress in the Midwest and Delta regions at least for a few days.
The whole region is getting rain today and tomorrow and the moisture extends into South Dakota and Nebraska.
The five-day forecast shows that almost all of the Midwest and Plains will get at least one inch of accumulation and the border region of Oklahoma, Texas and Arkansas could get five inches or more.
Good weather in Ukraine this spring has improved the prospects for winter crops there. Drought last fall reduced seeded area but the crop that survived the winter is now in good shape thanks to warm weather and adequate moisture.
One of the reasons that fund money has moved into crop market is that they want to be positioned to benefit if there is a rapid transition to a La Nina, which has been associated with dry weather in the U.S. Midwest.
Australia’s government weather forecaster today said most of the climate models it uses show that a La Nina — cool water in the equatorial Pacific — should develop by September.
That would likely be too late to affect North American crops.
But Reuters agricultural market analyst Karen Braun today notes that water in the eastern Pacific has cooled rapidly the region could be argued to be in a La Nina state already.
She said the area to the west needs to cool to start to affect global weather and that will depend on stronger trade winds to move the cooler water west. The immediate forecast sees fairly calm trade winds over the next 10 days.
But if the winds pick up, the rapid cooling could spread quickly, raising the potential for it to affect Midwestern crops during the growing period, Braun says.
Light crude oil nearby futures in New York were up $1.40 to US$44.04 per barrel.
The Canadian dollar at noon was US79.28 cents, up from 78.86 cents the previous trading day. The U.S. dollar at noon was C$1.2614.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 13.45 points, or 0.10 percent, at 13,809.44.
The Dow Jones industrial average rose 11.85 points, or 0.07 percent, to 17,989.09, the S&P 500 gained 3.77 points, or 0.18 percent, to 2,091.56 and the Nasdaq Composite slipped 7.48 points, or 0.15 percent, to 4,888.31.
Winnipeg ICE Futures Canada dollars per tonne
Canola May 2016 499.10 +2.80 +0.56%
Canola Jul 2016 501.00 +2.30 +0.46%
Canola Nov 2016 492.90 -0.10 -0.02%
Canola Jan 2017 496.50 -1.40 -0.28%
Canola Mar 2017 498.40 -0.70 -0.14%
Milling Wheat May 2016 239.00 +1.00 +0.42%
Milling Wheat Jul 2016 237.00 +1.00 +0.42%
Milling Wheat Oct 2016 232.00 unch 0.00%
Durum Wheat May 2016 297.00 +1.00 +0.34%
Durum Wheat Jul 2016 294.00 +4.00 +1.38%
Durum Wheat Oct 2016 290.00 +11.00 +3.94%
Barley May 2016 172.00 unch 0.00%
Barley Jul 2016 174.00 unch 0.00%
Barley Oct 2016 174.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans May 2016 1017.75 +18 +1.80%
Soybeans Jul 2016 1027.25 +17.5 +1.73%
Soybeans Aug 2016 1027.75 +16 +1.58%
Soybeans Sep 2016 1017 +13.5 +1.35%
Soybeans Nov 2016 1009 +11.25 +1.13%
Soybeans Jan 2017 1010.75 +10.5 +1.05%
Soybean Meal May 2016 323.3 +6.9 +2.18%
Soybean Meal Jul 2016 326.6 +7.1 +2.22%
Soybean Meal Aug 2016 326.6 +7.1 +2.22%
Soybean Oil May 2016 33.94 +0.04 +0.12%
Soybean Oil Jul 2016 34.21 +0.01 +0.03%
Soybean Oil Aug 2016 34.32 +0.01 +0.03%
Corn May 2016 382.25 +5.25 +1.39%
Corn Jul 2016 387.25 +5.5 +1.44%
Corn Sep 2016 388.75 +6.5 +1.70%
Corn Dec 2016 394.5 +6.75 +1.74%
Corn Mar 2017 404 +7.5 +1.89%
Oats May 2016 195.75 -1.25 -0.63%
Oats Jul 2016 205.5 -0.75 -0.36%
Oats Sep 2016 213.75 -0.25 -0.12%
Oats Dec 2016 221 -0.75 -0.34%
Oats Mar 2017 231.25 +0.25 +0.11%
Wheat May 2016 479.75 +8.5 +1.80%
Wheat Jul 2016 487.75 +10 +2.09%
Wheat Sep 2016 497.25 +10 +2.05%
Wheat Dec 2016 514 +9.75 +1.93%
Wheat Mar 2017 528.75 +9.75 +1.88%
Minneapolis
Spring Wheat May 2016 534 +6.25 +1.18%
Spring Wheat Jul 2016 542.75 +5.25 +0.98%
Spring Wheat Sep 2016 550 +5 +0.92%
Spring Wheat Dec 2016 560.5 +5 +0.90%
Spring Wheat Mar 2017 569.75 +6 +1.06%
Kansas City
Hard Red Wheat May 2016 466.25 +3.75 +0.81%
Hard Red Wheat Jul 2016 478 +4.25 +0.90%
Hard Red Wheat Sep 2016 492.5 +4.5 +0.92%
Hard Red Wheat Dec 2016 516 +5 +0.98%
Hard Red Wheat Mar 2017 529.75 +5 +0.95%
