Canola staged an impressive rally Thursday considering the expectations of a bumper Canadian canola crop.
The trigger for today’s rally was mostly the rally in U.S. soybeans that followed a mildly bullish soybean numbers in today’s USDA monthly supply and demand report.
Also positive for canola was unconfirmed talk of new business to China and technical momentum once the price climbed back above $500.
November canola closed at $504.00, up $ 7.10.
Yield reports have farmers smiling. The Statistics Canada July field crop production report that came out in mid August had a Saskatchewan canola yield forecast of 31.2 bu. per acre. Today, Saskatchewan Agriculture said that of the crop harvested so far, canola yields are averaging about 35 bu. per acre.
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U.S. grains: Soybean futures set two-week high on US weather worry, soyoil rally
Chicago Board of Trade soybean futures touched a two-week high on Friday on worries that heat may threaten U.S. crops and expectations that the country’s biofuel policy would boost demand for soyoil, analysts said.
Today’s USDA soybean production number was neutral at 3.149 billion bushels. Analysts had forecast 3.140 bln bu. USDA’s August forecast was 3.255 bln bu.
USDA sees soybean yield at 41.2 bu. per acre, down from 42.6 in August. Last year 39.6 bu. per acre
The 2013-14 year end soybean stocks forecast was a little more bullish coming in at 0.150 billion bu. Analysts had forecast 0.165 billion bu. USDA’s August forecast was 0.220 billion.
Most analysts now think that the October USDA forecast will again lower soybean yield. The survey and field inspection data for today’s report was done at the start of the month and there has been two weeks of very hot dry weather in the western Midwest since then. That should have hurt yields.
I’m no technical analyst, but keep an eye out to see if November soybeans in coming days can climb above $14.095, which is the contract high, set Aug. 27 (also way back Sept. 14 2012 it was at about that level). It bumped just shy of that level again Sept. 3 and then fell. If it can break above then there might be room to run higher.
The USDA report was bearish for corn, pegging the crop at 13.843 billion bu. Analysts had forecast 13.620 bln bu. USDA's August report was 13.763 bln bu.
USDA sees corn yield at 155.3 bu. per acre, up from 154.4 in August, despite the hot dry weather.
USDA put U.S. 2013-14 corn ending stocks at 1.855 bln bu., above the analysts’ forecast of 1.732 billion. In August USDA had forecast 1.837 billion.
Reuters reported USDA said higher corn yields for the central plains and across the south more than offset yield reductions for Iowa and North Dakota. Some analysts are questioning a significant increase in the USDA yield outlook for South Dakota, considering blistering heat and little rain through most of August and September.
Some analysts believe the October USDA report will shave down the harvested acreage number. But most see this stocks number of 1.837 billion bu. as a pretty bearish number.
After the report, Reuters said, the price ratio of November 2013 soybeans to December corn rose to nearly 3-to-1, while the ratio for the May 2014 soy and corn contracts also rose. The price strength of soybeans versus corn should encourage aggressive soybean planting in South America in the coming weeks. USDA forecast a record Brazilian soy crop.
USDA’s report was also bearish wheat. USDA world wheat production estimate climbed to 708.89 million tonnes, up from 705.38 million in August. Ending stocks 2013-14 were forecast at 176.28 million tonnes, up from 172.99 million in August.
Partly offsetting that bearishness is the very strong pace of exports from the U.S. and Europe so far this crop year with Egypt, China and Brazil all showing good demand.
The Canadian Grain Commission is changing the way it reports exports and we hope it will soon have Canadian numbers for August.
ICE Futures Canada lowered its milling wheat and barley contract values. There was no trade.
ICE Futures Canada, dollars per tonne
Canola Nov 2013 504.00 +7.10 +1.43%
Canola Jan 2014 511.40 +7.20 +1.43%
Canola Mar 2014 517.80 +7.20 +1.41%
Canola May 2014 522.60 +7.50 +1.46%
Canola Jul 2014 526.20 +7.90 +1.52%
Milling Wheat Oct 2013 238.00 -5.00 -2.06%
Milling Wheat Dec 2013 242.00 -4.00 -1.63%
Milling Wheat Mar 2014 248.00 -3.00 -1.20%
Durum Wheat Oct 2013 259.00 unch 0.00%
Durum Wheat Dec 2013 267.00 unch 0.00%
Durum Wheat Mar 2014 273.00 unch 0.00%
Barley Oct 2013 179.00 -10.00 -5.29%
Barley Dec 2013 184.00 -10.00 -5.15%
Barley Mar 2014 184.00 -10.00 -5.15%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Sep 2013 1442 +36.75 +2.62%
Soybeans Nov 2013 1396 +37.75 +2.78%
Soybeans Jan 2014 1393.5 +35.5 +2.61%
Soybeans Mar 2014 1365.25 +24.75 +1.85%
Soybeans May 2014 1331.75 +18.75 +1.43%
Soybeans Jul 2014 1322.5 +15.5 +1.19%
Soybean Meal Sep 2013 480.9 +20 +4.34%
Soybean Meal Oct 2013 449.2 +20 +4.66%
Soybean Meal Dec 2013 447.2 +19.2 +4.49%
Soybean Oil Sep 2013 42.69 +0.04 +0.09%
Soybean Oil Oct 2013 42.78 +0.06 +0.14%
Soybean Oil Dec 2013 43.03 +0.07 +0.16%
Corn Sep 2013 479 -0.75 -0.16%
Corn Dec 2013 466.25 -6.25 -1.32%
Corn Mar 2014 478.5 -6.25 -1.29%
Corn May 2014 486.75 -6.25 -1.27%
Corn Jul 2014 493.75 -5.75 -1.15%
Oats Sep 2013 367 -4 -1.08%
Oats Dec 2013 318.25 -4 -1.24%
Oats Mar 2014 321.25 -4.75 -1.46%
Oats May 2014 324.25 -3.25 -0.99%
Oats Jul 2014 315.25 -3.25 -1.02%
Wheat Sep 2013 641.75 +6.75 +1.06%
Wheat Dec 2013 653 +5 +0.77%
Wheat Mar 2014 664.25 +5.25 +0.80%
Wheat May 2014 670.75 +4.75 +0.71%
Wheat Jul 2014 667.75 +6.25 +0.94%
Minneapolis
Spring Wheat Sep 2013 705.5 unch 0.00%
Spring Wheat Dec 2013 714.75 +4.75 +0.67%
Spring Wheat Mar 2014 725 +1.5 +0.21%
Spring Wheat May 2014 732.75 +1.75 +0.24%
Spring Wheat Jul 2014 740.5 +3 +0.41%
Kansas City
KCBT Red Wheat Sep 2013 706.75 -1.5 -0.21%
KCBT Red Wheat Dec 2013 701.75 +7 +1.01%
KCBT Red Wheat Mar 2014 708 +7.25 +1.03%
KCBT Red Wheat May 2014 711.75 +8 +1.14%
KCBT Red Wheat Jul 2014 702.5 +9.25 +1.33%
Light crude oil nearby futures in New York rose $1.04 at $108.60 US per barrel.
The Canadian dollar at noon was 96.90 cents US, up from 96.74 cents the previous trading day. The U.S. dollar at noon was $1.0320 Cdn.
Bullion, and gold stocks by extension, fell on fears that the U.S. Federal Reserve’s monetary stimulus measures might soon come to an end.
In unofficial tallies —
The Toronto Stock Exchange’s S&P/TSX composite index fell 124.37 points, or 0.97 percent, to close at 12,701.05.
The Dow Jones industrial average was down 26.03 points, or 0.17 percent, at 15,300.57.
The Standard & Poor’s 500 Index was down 5.71 points, or 0.34 percent, at 1,683.42.
The Nasdaq Composite Index was down 9.04 points, or 0.24 percent, at 3,715.97.
