Finally, a day of modest optimism in grain markets. Canola and other crop futures rose Tuesday on bargain buying and, in soybeans, firming U.S. cash markets.
Favourable weather in the U.S., with most of the Midwest expected to get rain over the next week, continued to limit gains.
Wheat was the strongest gainer on concerns about wheat quality in the U.S. soft red crop and Europe’s crop. Also, another forecaster dropped its outlook or Russian wheat crop to well below 50 million tonnes.
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And demand from China and Egypt supported the wheat market.
Canola was supported by ideas that the price is oversold, after falling more than 20 percent in July. It is now undervalued relative to soybeans.
Oilseeds were supported by another small gain in Malaysian palm oil, supported by trade stats that showed July shipments were a little stronger than June. Exports in July started slowly but surged late in the month.
Chicago wheat gained modestly in July, rising 2.3 percent compared to corn’s fall of 26.5 percent.
Weather concerns in the Black Sea region and rising export demand supported wheat, which might have risen more if not for corn’s fall.
“The world balance sheet for wheat is in a precarious position,” Ken Smithmier, analyst with the Hightower Group told Reuters. “With plenty of evidence to suggest additional cuts to world production and a bullish bias towards world demand, the upside for wheat looks exceptional once the market has more conviction as to the size of the U.S. corn crop.”
Crop forecaster Lanworth on Wednesday cut its forecast for Russian wheat production by three percent to 48.4 million tonnes.
USDA’s current outlook is 54 million tonnes.
Lanworth’s report was bearish corn, but slightly bullish soybeans.
It expects the 2013-14 U.S. corn crop to be 14 billion bushels, based on an average yield of 158.5 bu. per acre. It had previously forecast U.S. corn production of 13.65 billion bu.
USDA’s current outlook is 13.95 billion bu. and the yield is 156.5 bu. per acre.
Lanworth’s new estimate for world corn production is 965 million tonnes, up nine million from the outlook it issued two weeks ago.
USDA’s forecast is 959.84 million tonnes.
Lanworth trimmed its estimate of U.S. soybean production to 3.310 billion bu. from 3.315 billion, warning that the outlook was dependent on rainfall and temperatures during August.
USDA’s current U.S. soybean crop forecast is 3.42 billion.
Lanworth estimates for world wheat production and world soybean production were unchanged at 694 million tonnes and 283 million tonnes respectively.
USDA’s forecast for wheat is 697.8 million and for soybeans is 285.89 million.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2013 485.00 +2.20 +0.46%
Canola Jan 2014 489.00 +2.30 +0.47%
Canola Mar 2014 492.30 +1.90 +0.39%
Canola May 2014 494.80 +2.10 +0.43%
Canola Jul 2014 497.70 +2.30 +0.46%
Milling Wheat Oct 2013 254.00 unch 0.00%
Milling Wheat Dec 2013 257.00 unch 0.00%
Milling Wheat Mar 2014 264.00 unch 0.00%
Durum Wheat Oct 2013 293.00 unch 0.00%
Durum Wheat Dec 2013 297.00 unch 0.00%
Durum Wheat Mar 2014 307.00 unch 0.00%
Barley Oct 2013 189.00 unch 0.00%
Barley Dec 2013 194.00 unch 0.00%
Barley Mar 2014 194.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Aug 2013 1374 +24 +1.78%
Soybeans Sep 2013 1249.75 +0.75 +0.06%
Soybeans Nov 2013 1206.25 +3.25 +0.27%
Soybeans Jan 2014 1211 +3 +0.25%
Soybeans Mar 2014 1212.75 +5 +0.41%
Soybeans May 2014 1212.75 +5.5 +0.46%
Soybean Meal Aug 2013 435.1 +5.9 +1.37%
Soybean Meal Sep 2013 404 -1.2 -0.30%
Soybean Meal Oct 2013 369.4 +0.8 +0.22%
Soybean Oil Aug 2013 42.09 -0.02 -0.05%
Soybean Oil Sep 2013 42.27 -0.03 -0.07%
Soybean Oil Oct 2013 42.41 -0.02 -0.05%
Corn Sep 2013 499 +3.5 +0.71%
Corn Dec 2013 479 +1.5 +0.31%
Corn Mar 2014 491.5 +1.25 +0.25%
Corn May 2014 499.25 +1.25 +0.25%
Corn Jul 2014 505.5 +1 +0.20%
Oats Sep 2013 340.25 +2.25 +0.67%
Oats Dec 2013 331.5 +0.75 +0.23%
Oats Mar 2014 336 +1.25 +0.37%
Oats May 2014 336.25 +1.25 +0.37%
Oats Jul 2014 341.25 +1.25 +0.37%
Wheat Sep 2013 664.25 +9 +1.37%
Wheat Dec 2013 677 +9.25 +1.39%
Wheat Mar 2014 687.75 +9.75 +1.44%
Wheat May 2014 693 +8.75 +1.28%
Wheat Jul 2014 689 +8 +1.17%
Minneapolis
Spring Wheat Sep 2013 741.25 +4 +0.54%
Spring Wheat Dec 2013 751 +2.5 +0.33%
Spring Wheat Mar 2014 762.25 +1 +0.13%
Spring Wheat May 2014 770.25 +1.25 +0.16%
Spring Wheat Jul 2014 777.75 +2.75 +0.35%
Kansas City
KCBT Red Wheat Sep 2013 706.75 +10.5 +1.51%
KCBT Red Wheat Dec 2013 717 +8.75 +1.24%
KCBT Red Wheat Mar 2014 725.5 +8.25 +1.15%
KCBT Red Wheat May 2014 726.75 +7.5 +1.04%
KCBT Red Wheat Jul 2014 714.75 +6.5 +0.92%
Light crude oil nearby futures in New York rose $1.95 at $105.03 US per barrel.
The Canadian dollar at noon was 97.21 cents US, up from 97.15 cents the previous trading day. The U.S. dollar at noon was $1.0287 Cdn.
The United States Federal Reserve, after a two day monthly meeting, gave no new guidance about its plans regarding its bond buying stimulus program.
U.S. stock markets initially reacted favourably but closed mixed.
The Canadian economy grew by 0.2 percent in May from April, according to Statistics Canada data on Wednesday, below forecasts and dampening expectations for the second quarter.
The fifth consecutive monthly increase beat the 0.1 percent rate registered in April, but the median forecast in a Reuters survey was for 0.3 percent growth,
In early unofficial tallies —
The Toronto Stock Exchange’s S&P/TSX composite index fell 95.11 points, or 0.76 percent, to close at 12,486.64.
The Dow Jones industrial average fell 21.05 points or 0.14 percent, to finish at 15,499.54, well off a record intraday high of 15,634.32.
The S&P 500 dipped 0.24 of a point, or 0.01 percent, to end at 1,685.72.
The Nasdaq Composite added 9.90 points or 0.27 percent, to close unofficially at 3,626.37.
