Canola jumped higher on Tuesday, pulled up by soybeans that were on a tear as the market believes prices must rise to limit demand to match the falling U.S. production outlook.
Soybeans climbed to a record high, surpassing $17 per bushel for the first time.
November canola closed at $629.50, up $8.10.
The falling U.S. buck bolstered U.S. crop futures. The market is becoming more confident that the EU is addressing its debt crisis and so money that was parked in the “safe haven” U.S. dollar is flowing back into other currencies.
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U.S. grains: Corn futures edge up, soybeans sag on improving US crop ratings
Chicago Board of Trade corn futures extended slight gains on Tuesday as short covering and bargain buying continued to support a rebound from contract lows reached during the previous session.
The euro climbed to a seven week high.
• Statistics Canada production estimates will be released tomorrow. According to a Reuters poll, analysts on average expect an average Canada canola yield of 34.7 bushels per acre and production of 16.4 million tonnes.
The market expects there will be good demand for however much canola Canada produces this year. In the first six months of 2012, China has imported 1.75 million tonnes of Canadian canola, an increase of 334 percent over the same period the year before.
China imported 561,709 tonnes of Canadian canola oil, double the amount in the first six months of 2011.
• The Pro Farmer crop tour is in its second day. The publication invites analysts, processers and journalists, among others, on a drive through a set route though the Midwest each year to sample fields and forecast corn yield.
In Ohio yesterday it estimated the average yield at 110.5 bushels per acre, well down from the USDA projection on 126 bu.
South Dakota yields were worse and scouts came across many fields that had already been harvested for silage to feed on-farm cattle.
There is speculation that not only will the national average corn yield be lower than the current USDA number, but that the harvested acreage forecast will also have to be lowered.
Early results from central and north-central Indiana this morning showed better than expected crops, but that area has received more rain that than southern parts of the state. As the tour moved west into the state, crops looked worse.
The second part of the crop tour, moving along the western side of the Midwest moved through irrigated fields in Nebraska where yields were good today.
The tour does not forecast soybean yields but does assess count seedpods and yesterday’s results were down from last year.
• Wheat continues to be supported by speculation that Russia and Ukraine might restrict wheat exports because of small crops.
• Climate watchers are predicting an El Nino will develop this fall and they might be right. The El Nino system tends to bring wet weather to South America.
Well, Argentina is headed for its wettest August on record.
Storms are lashing the rich farmlands that make Argentina the world’s No. 2 corn exporter and No. 3 soybean supplier.
The improving soil moisture will help kick off the corn and soybean growing season. Wheat is already seeded there.
However, key areas of neighbouring Brazil remain dry.
Winnipeg (per tonne)
Canola Nov 12 $629.50, up $8.10 +1.30%
Canola Jan 13 $634.00, up $7.90 +1.26%
Canola Mar 13 $635.80, up $8.10 +1.29%
Canola May 13 $622.70, up $5.70 +0.92%
Milling Wheat Oct 12 $300.50, up $5.80 +1.97%
Milling Wheat Dec 12 $307.50, up $7.20 +2.40%
Milling Wheat Mar 13 $317.50, up $7.20 +2.32%
Durum Wheat Oct 12 $301.10, up $1.90 +0.64%
Durum Wheat Dec 12 $305.60, up $1.90 +0.63%
Durum Wheat Mar 13 $312.20, up $1.90 +0.61%
Barley Oct 12 $264.50, unchanged
Barley Dec 12 $269.50, unchanged
Barley Mar 13 $272.50, unchanged
Chicago (per bushel)
Soybeans (P) Sep 12 $17.535, up 49.75 +2.92%
Soybeans (P) Nov 12 $17.325 +49.0 +2.91%
Soybeans (P) Jan 13 $17.205, up 46.75 +2.79%
Soybeans (P) Mar 13 $16.2325, up 45.0 +2.85%
Corn (P) Sep 12 $8.3125, up 16.0 +1.96%
Corn (P) Dec 12 $8.3875, up 15.0 +1.82%
Corn (P) Mar 13 $8.3775, up 13.75 +1.67%
Oats (P) Sep 12 $3.9675, up 8.25 +2.12%
Oats (P) Dec 12 $3.97, up 8.25 +2.12%
Oats (P) Mar 13 $3.95, up 6.25 +1.61%
Minneapolis (per bushel)
Spring Wheat Sep 12 $9.4475, up 13.75 +1.48%
Spring Wheat Dec 12 $9.5975, up 16.0 +1.70%
Spring Wheat Mar 13 $9.6675, up 14.25 +1.50%
Spring Wheat May 13 $9.7225, up 13.25 +1.38%
The Bank of Canada noon rate for the loonie was $1.0138 US, up from 1.0111 the day before.
The U.S. dollar was 98.64 cents Cdn.
Nearby crude oil in New York closed at 96.68, up 71 cents per barrel.
In early tallies:
The Toronto Stock Exchange’s S&P/TSX composite index rose 40.89 points, or 0.34 percent, to close at 12,116.92.
The Dow Jones industrial average fell 68.06 points, or 0.51 percent, to 13,203.58.
The S&P 500 Index dropped 4.96 points, or 0.35 percent, to 1,413.17.
The Nasdaq Composite lost 8.95 points, or 0.29 percent, to 3,067.26.
