Canola pressured by falling soybeans, crude oil

By D’Arce McMillan, markets editor

Twitter @ darcemcmillan

Canola futures fell a little Tuesday, weakened by lower soy seed, meal and oil and by sharply lower crude oil values.

The loonie has fallen by more than USone cent over the past two days and that helped limit the decline in canola. The US buck is rising on the assumption that its monetary policy will tighten while central banks in Japan and the European Union increase their stimulus.

The advancing U.S. harvest weighed on U.S. crop markets as did private production forecasts that indicate the U.S. Department of Agriculture might increase its production estimate in its monthly report on Nov. 10.

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Vegetable oils were pressured by falling crude oil, which has dropped about 4.4 percent in the past two days for west Texas intermediate, traded in New York.

Crude oil was already falling because oil production is outstripping global demand but the latest decline was sparked by Saudi Arabia’s decision to cut prices to its U.S. customers.

It is believed the Saudi action is designed to pressure U.S. domestic oil production, which is growing because of new technology such as fracking. This is an expensive process and the expansion of U.S. production depends on high oil prices. If the Saudis can pressure the price lower, the U.S. expansion would be reduced.

American farmers posted good harvest progress last week.

The USDA said after the close on Monday that the U.S. soybean harvest was 83 percent complete, matching the five-year average and ahead of an average trade estimate of 81 percent.

The U.S. corn harvest was 65 percent harvested, slightly above trade expectations but behind the five-year average of 73 percent.

USDA said the U.S. winter wheat crop was 90 percent seeded, in line with the five-year average of 89 percent, although delays persisted in soft wheat areas of Illinois and Missouri.

USDA rated 59 percent of the winter wheat crop as good to excellent, unchanged from the previous week.

A cold front is moving through central and southern Brazil, bringing rain that is needed in central areas to get seeding back on track.

While there has been a bit of weakness in the last couple of days, soy meal remains supported by rail problems in the U.S. getting soybeans to domestic crushing plants and to ports.

There are historically large export bookings of soy meal.

Soybean exports are also strong.

The U.S. Department of Agriculture said Monday that 2.77 million tonnes of soybeans were inspected for export in the week ended Oct. 30, 23 percent above the same week a year ago.

The week’s total was the largest on record for the oilseed, analysts said, and well above trade projections for 1.85 million to 2.1 million tonnes, Reuters reported.

Brokerage INTL FCStone forecasts U.S. 2014 soybean production at 4.033 billion bushels and Informa Economics pegs it at 3.991 billion. Both are above USDA’s current estimate of 3.927 billion.

INTL FCStone forecasts corn production at 14.783 billion bushels and Informa pegged it at 14.49. Both are above USDA’s current estimate of 14.475 billion.

The drop in crude oil prices and the subsequent pressure on oil company shares weighed down North American stock markets.

The TSX composite was headed toward a loss of about one percent on the day.

Major American indexes were down a little less, with the S&P headed for a loss of about a third of a percentage point and the Dow Jones almost unchanged.

Light crude oil nearby futures in New York dropped $1.59 at US$77.19 per barrel.

The Canadian dollar at noon was US87.74 cents, down from 88.34 cents the previous trading day. The U.S. dollar at noon was C$1.1397.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014 445.80 -2.30 -0.51%

Canola Jan 2015 431.10 -1.80 -0.42%

Canola Mar 2015 429.10 -3.30 -0.76%

Canola May 2015 429.40 -4.00 -0.92%

Canola Jul 2015 428.80 -5.50 -1.27%

Milling Wheat Dec 2014 222.00 -3.00 -1.33%

Milling Wheat Mar 2015 228.00 -3.00 -1.30%

Milling Wheat May 2015 232.00 -3.00 -1.28%

Durum Wheat Dec 2014 356.50 unch 0.00%

Durum Wheat Mar 2015 357.50 unch 0.00%

Durum Wheat May 2015 357.50 unch 0.00%

Barley Dec 2014 140.00 unch 0.00%

Barley Mar 2015 143.00 unch 0.00%

Barley May 2015 143.00 unch 0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago

Soybeans Nov 2014 1010 -18.75 -1.82%

Soybeans Jan 2015 1009.75 -20 -1.94%

Soybeans Mar 2015 1014.5 -19.25 -1.86%

Soybeans May 2015 1019.5 -19.5 -1.88%

Soybeans Jul 2015 1024 -19 -1.82%

Soybeans Aug 2015 1024.5 -19 -1.82%

Soybean Meal Dec 2014 372.5 -0.2 -0.05%

Soybean Meal Jan 2015 354.4 -2 -0.56%

Soybean Meal Mar 2015 337.2 -3.6 -1.06%

Soybean Oil Dec 2014 33.07 -0.96 -2.82%

Soybean Oil Jan 2015 33.27 -0.98 -2.86%

Soybean Oil Mar 2015 33.49 -0.98 -2.84%

Corn Dec 2014 364.5 -9 -2.41%

Corn Mar 2015 377.25 -8.75 -2.27%

Corn May 2015 386 -8.75 -2.22%

Corn Jul 2015 392.75 -8.25 -2.06%

Corn Sep 2015 398.75 -8 -1.97%

Oats Dec 2014 342.5 -4.75 -1.37%

Oats Mar 2015 336 -5 -1.47%

Oats May 2015 331 -4 -1.19%

Oats Jul 2015 324 -3.5 -1.07%

Oats Sep 2015 326.5 -2.5 -0.76%

Wheat Dec 2014 530.5 -7.75 -1.44%

Wheat Mar 2015 542 -8.75 -1.59%

Wheat May 2015 548 -9.25 -1.66%

Wheat Jul 2015 554.75 -8.5 -1.51%

Wheat Sep 2015 564.75 -8.75 -1.53%

Minneapolis

Spring Wheat Dec 2014 569 -8 -1.39%

Spring Wheat Mar 2015 579.5 -8 -1.36%

Spring Wheat May 2015 588.25 -8 -1.34%

Spring Wheat Jul 2015 597.75 -7.75 -1.28%

Spring Wheat Sep 2015 606 -8.25 -1.34%

Kansas City

Hard Red Wheat Dec 2014 590.25 -7.25 -1.21%

Hard Red Wheat Mar 2015 594 -8 -1.33%

Hard Red Wheat May 2015 595.5 -8.25 -1.37%

Hard Red Wheat Jul 2015 591.25 -8 -1.34%

Hard Red Wheat Sep 2015 601.75 -7.25 -1.19%

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