Canola futures sold off late in the trading day and posted only a 60 cent gain by the close Friday.
The main driver early in the day was a sharply lower Canadian dollar.
The loonie was down more than one cent, with the Bank of Canada noon rate at $1.0068 US, down from $1.0196 the day before.
November canola closed at $611.90, up 60 cents or 0.1 percent.
Soybeans were down slightly on profit taking after gains the last couple of days.
For the week, November canola rose $5.20.
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There is still no carry in the market, with deferred canola futures months lower than the nearby November contract.
Agriculture Canada late on Thursday released a monthly supply and demand outlook that was bullish for canola. Details are further down in this report.
• The U.S. dollar gained against other currencies as investors’ risk appetite diminished. At a European summit Thursday leaders made progress on agreeing to a single euro zone banking supervisor, but made no progress in finding a solution to Spain’s debt problems.
Also, a report showed U.S. home resales fell in September.
• The Canadian dollar was specifically under pressure after the monthly inflation report for September came in at 1.2 percent, unchanged from August.
That gives no incentive to the Bank of Canada to raise interest rates.
Earlier this year, the bank had indicated it would raise rates if an improving economy fueled inflation. The prospect of higher interest rates had supported the loonie’s move above par.
• Generally, equity and commodity markets had their worst day in months as investors shifted away from risk and because a couple of big name American companies filed disappointing quarterly profit reports.
• The Canadian Oilseed Processors Association said members crushed 147,933 million tonnes in the week ending Oct. 17, down about five percent from the previous week. That represented a capacity use of 89 percent, which is still better than the crop year to date and better than last year at this time.
• Wheat futures were supported by news that Ukraine’s agriculture ministry plans to stop wheat exports beginning Nov. 15.
Details are still unclear but the move was expected. Bad weather reduced Ukraine’s crop this summer. The amount in excess of domestic requirements, about five million tonnes, was expected to be all exported by the middle of November.
By the close, wheat futures had settled lower
• Agriculture Canada expects canola buyers will be scraping the bottom of the barrel for supply by the end of the crop year.
The market analysis group of the department’s grains and oilseeds division released a monthly outlook Oct. 19 that pegged 2012-13 year-end stocks falling to a razor thin 450,000 tonnes.
The stock-to-use ratio falls to three percent from five percent last year and 16 percent for 2010-11.
Such tight stocks prompted Agriculture Canada to make an aggressive average price forecast of $630-$670 per tonne.
November futures now stand at $616 per tonne.
The analysts expect exports to fall sharply to 7.2 million tonnes from 8.7 million 2011-12 despite continued strong world demand on tight domestic supplies.
Domestic processing of canola is forecast to fall by seven percent to 6.5 million as lower domestic supplies prevent crushers from responding to continued attractive crush margins and expanded processing capacity.
The Agriculture Canada analysis says producer deliveries are expected to be heavily weighted to the first half of the crop year on near record prices.
The oil content of the crop is about two percent lower than last year, with the harvest survey average for all grades across Western Canada at 43.2 percent to date.
Winnipeg (per tonne)
Canola Nov 12 $611.90, up 0.60 +0.10%
Canola Jan 13 $610.60, up 0.40 +0.07%
Canola Mar 13 $609.10, up 0.30 +0.05%
Canola May 13 $603.80, up 1.40 +0.23%
Milling Wheat Dec 12 $304.60, up 2.70 +0.89%
Milling Wheat Mar 13 $314.10, up 2.70 +0.87%
Milling Wheat May 13 $317.10, up 2.70 +0.86%
Durum Wheat Dec 12 $312.40, unchanged
Durum Wheat Mar 13 $319.00, unchanged
Durum Wheat May 13 $323.00, unchanged
Barley Dec 12 $250.00, unchanged
Barley Mar 13 $253.00, unchanged
Barley May 13 $254.00, unchanged
Chicago (per bushel)
Soybeans (P) Nov 12 $15.34 -11.5 -0.74%
Soybeans (P) Jan 13 $15.365 -9.75 -0.63%
Soybeans (P) Mar 13 $15.0925, down 10.5 -0.69%
Soybeans (P) May 13 $14.6375, down 12.0 -0.81%
Corn (P) Dec 12 $7.615, up 0.75 (+0.10%)
Corn (P) Mar 13 $7.595, up 0.25 (+0.03%)
Corn (P) May 13 $7.5375, down 0.25 -0.03%
Oats (P) Dec 12 $3.9425, up 0.25 +0.06%
Oats (P) Mar 13 $3.98, unchanged
Oats (P) May 13 $3.9875, up 2.5 +0.63%
Minneapolis (per bushel)
Spring Wheat Dec 12 $9.425, down 1.5 cents -0.16%
Spring Wheat Mar 13 $9.4275, down 2.25 -0.24%
Spring Wheat May 13 $9.48, down 3.25 -0.34%
Spring Wheat Jul 13 $9.445, down 4.5 -0.47%
Nearby crude oil in New York closed at $90.05 per barrel, down $2.05.
The Bank of Canada’s closing rate was the same as the noon rate. One loonie bought $1.0068 US. One U.S. buck bought 99.32 cents Cdn.
The Toronto Stock Exchange’s S&P/TSX composite index fell 50.14 points, or 0.4 percent to finish at 12,415.98.
The Dow Jones industrial average dropped 214.37 points, or 1.58 percent, to close at 13,334.57.
The Standard & Poor’s 500 Index fell 25.55 points, or 1.75 percent, to 1,431.79.
The Nasdaq Composite Index plunged 71.02 points, or 2.31 percent, to 3,001.85.
For the week, the TSX composite rose 1.75 percent. The Dow edged up just 0.1 percent, the S&P 500 rose 0.3 percent and the Nasdaq lost 1.3 percent, hit hard by the poor quarterly showing at Google.
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