Canola rises as market prepares for Friday USDA report

Canola futures rose along with the soy complex and corn Thursday but most wheat contracts edged lower.

Canola gained in thin trade even though the loonie rose, a situation that normally pressures canola lower.

Most of the trade in canola was to adjust old crop-new crop spreads.

Rising soybean futures supported canola as did mild concern about the late start to the seeding season on the Prairies.

Soybeans rose as traders positioned themselves ahead of Friday’s USDA reports on crop production and stocks. There was some bargain buying after the recent price decline.

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Old crop soybeans were falling the past few days on signs of weakening nearby demand and new supply arriving in the U.S. from Brazil, but today the focus was on the possibility of the USDA further trimming its year-end soybean stocks estimate.

Weekly U.S. soybean sales were within the range of traders’ expectations.

Chicago and Minneapolis wheat fell on profit taking, but Kansas hard red spring futures edged higher on concern about the southern Plains drought.

Reuters reported the average analyst estimate for U.S. 2014 winter wheat production ahead of USDA’s May crop production report on Friday was 1.468 million bushels, down from 1.534 million in 2013. However, the report will likely be dismissed as out of date because of the stress the crop was under earlier this week from sizzling temperatures.

Still, many analysts believe that the market will eventual shift focus from the plight of the U.S. hard red winter crop and start to focus on the huge year-end wheat stocks in Canada and the outlook for big new crops in much of the world.

Investment bank Morgan Stanley said this week that the price rally will likely stall and drop to average of $5.50, while Goldman in April forecast a drop of 24 percent by mid-October to about $5.60.

Crop seeding has begun in Saskatchewan but progress is far behind the norm because of cool wet weather. Saskatchewan Agriculture’s weekly crop report said almost all areas have adequate to surplus moisture.

Recent rains in Western Australia are helping to get the wheat crop there off to an excellent start.

However, the chance of an El Nino developing is increasing. The U.S. weather service today said the likelihood of an El Nino developing over summer has risen to better than 65 percent from its estimate of 50 percent last month.

The Australian weather service pegs the possibility at 70 percent.

El Ninos tend to bring dry weather to Australia and palm producing regions in Malaysia and Indonesia and wet weather to parts of South America.

Pro-Russia separatists in eastern Ukraine say they will go on with a vote on self rule this weekend, ignoring Russian president Vladimir Putin’s call for a postponement.

Winnipeg ICE Futures Canada dollars per tonne

Canola May 2014 493.90 +9.30 +1.92%

Canola Jul 2014 479.90 +9.30 +1.98%

Canola Nov 2014 486.00 +8.50 +1.78%

Canola Jan 2015 491.20 +8.30 +1.72%

Canola Mar 2015 495.60 +8.00 +1.64%

Milling Wheat May 2014 247.00 unch 0.00%

Milling Wheat Jul 2014 252.00 unch 0.00%

Milling Wheat Oct 2014 252.00 -1.00 -0.40%

Durum Wheat May 2014 247.00 unch 0.00%

Durum Wheat Jul 2014 247.00 unch 0.00%

Durum Wheat Oct 2014 242.00 unch 0.00%

Barley May 2014 139.50 unch 0.00%

Barley Jul 2014 140.50 unch 0.00%

Barley Oct 2014 140.50 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 2014 1474.25 +23.25 +1.60%

Soybeans Jul 2014 1469.5 +23.25 +1.61%

Soybeans Aug 2014 1407.25 +13.5 +0.97%

Soybeans Sep 2014 1281 +8.25 +0.65%

Soybeans Nov 2014 1224 +6.75 +0.55%

Soybeans Jan 2015 1230.5 +6.75 +0.55%

Soybean Meal May 2014 490.6 +9.3 +1.93%

Soybean Meal Jul 2014 480.7 +5.8 +1.22%

Soybean Meal Aug 2014 454.4 +3.5 +0.78%

Soybean Oil May 2014 40.94 +0.27 +0.66%

Soybean Oil Jul 2014 41.12 +0.29 +0.71%

Soybean Oil Aug 2014 41.06 +0.25 +0.61%

Corn May 2014 513.25 +3 +0.59%

Corn Jul 2014 516.5 +2.5 +0.49%

Corn Sep 2014 513.25 +2.25 +0.44%

Corn Dec 2014 511.5 +2 +0.39%

Corn Mar 2015 519 +1.75 +0.34%

Oats May 2014 409 +0.25 +0.06%

Oats Jul 2014 353 -3 -0.84%

Oats Sep 2014 340 -3 -0.87%

Oats Dec 2014 331.25 +0.75 +0.23%

Oats Mar 2015 329.5 +0.75 +0.23%

Wheat May 2014 726.75 -3 -0.41%

Wheat Jul 2014 735.25 -2.5 -0.34%

Wheat Sep 2014 743.75 -2.75 -0.37%

Wheat Dec 2014 757.25 -2.5 -0.33%

Wheat Mar 2015 769.25 -2 -0.26%

Minneapolis

Spring Wheat May 2014 795 unch 0.00%

Spring Wheat Jul 2014 805.75 -0.75 -0.09%

Spring Wheat Sep 2014 813 -1.25 -0.15%

Spring Wheat Dec 2014 822.5 -1.5 -0.18%

Spring Wheat Mar 2015 829.25 +1.25 +0.15

Kansas City

KC HRW Wheat May 2014 832.5 -4 -0.48%

KC HRW Wheat Jul 2014 842.5 +1 +0.12%

KC HRW Wheat Sep 2014 845.75 +1 +0.12%

KC HRW Wheat Dec 2014 853.75 +2.5 +0.29%

KC HRW Wheat Mar 2015 856 +3.25 +0.38%

Light crude oil nearby futures in New York dropped 51 cents at $100.26 US per barrel.

The Canadian dollar at noon was 92.10 cents US, up from 91.78 cents the previous trading day. The U.S. dollar at noon was $1.0858 Cdn.

The Toronto Stock Exchange was weakened by lower energy company shares and lower than expected quarterly results at Canadian Tire. The market will be tuned-in to Statistics Canada’s April employment report on Friday.

The TSX composite closed down 110.38 points or 0.75 percent at 14,546.03.

The Dow Jones industrial average rose 4.53 points or 0.03 percent, to close at 16,523.07, the S&P 500 lost 5.88 points or 0.31 percent, to 1,872.33 and the Nasdaq Composite dropped 23.751 points or 0.58 percent, to finish at 4,043.923.