Canola rises on hot Midwest weather despite record acreage

Canola closed higher Wednesday despite a Statistics Canada seeding survey report that put acreage at the high end of the range of traders’ pre-report forecasts.

It appears farmers shifted barley and durum area into canola.

But the market mover was the fact that crops in the southern Midwest are baking in hot, dry weather just as corn reaches a critical point in establishing its yield.

July canola closed at 642.30, up $11.30

November closed at $589.00, up $4.90

Most crop futures closed up from the previous day, but settled down from their daily peaks as profit taking pared gains.

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StatsCan surveyed farmers between May 28 and June 7. There have been heavy rains since then and some intended acres might not have been seeded and other seeded area might have been flooded, but the situation is nowhere near as bad as last year.

Producers reported to StatsCan they had planted or intended to plant a record 21.27 million acres to the oil seed.

Traders and analysts surveyed by Reuters on average expected 20.9 million acres of canola, up from the StatsCan March prospective planting survey forecast of 20.4 million. The range of traders’ forecasts was 20.2 million to 21.7 million.

Last year farmers seeded 18.86 million acres.

• Barley area in the StatsCan report is a lot less than expected. Today’s report puts it at 7.37 million acres. That is up from last year’s 6.47, but shy of the 7.9 million that traders expected and less than what farmers said they intended to seed in StatsCan’s spring planting intentions report.

The rest of the StatsCan survey is at the bottom of this report.

• The next reports with potential to move the market are the USDA June 1 stocks report and updated acreage report due June 29.

• Also European leaders gather Thursday to discuss the debt crisis in the bloc. If traders are not happy with progress at the talks, it could set the market back.

• Outside markets rose on a U.S. report showing durable goods orders rose 1.1 percent last month on strong demand for transportation equipment. That was better than expected but the report showed underlying softness. A report showing a stronger housing market also helped lift equities.

Winnipeg (per tonne)

Canola Jul 12 $642.30, up $11.30 +1.79%

Canola Nov 12 $589.00, up $4.90 +0.84%

Canola Jan 13 $592.10, up $5.40 +0.92%

Canola Mar 13 $591.40, up $4.70 +0.80%

The best basis in the par region on the previous day was still $14 over the July contract, said ICE Futures Canada.

The 14-day relative strength index for the July contract is 68.

Western Barley Jul 12 $237.00, unchanged

Western Barley Oct 12 $217.00, up $9.00 +4.33%

Milling Wheat Oct 12 $269.30, up $4.30 +1.62%

Milling Wheat Dec 12 $276.60, up $4.30 +1.58%

Milling Wheat Mar 13 $285.60, up $4.30 +1.53%

Durum Wheat Oct 12 $275.50, unchanged

Durum Wheat Dec 12 $280.00, unchanged

Durum Wheat Mar 13 $286.60, unchanged

Barley Oct 12 $189.00, unchanged

Barley Dec 12 $191.70, unchanged

Barley Mar 13 $194.70, unchanged

Chicago (per bushel)

Soybeans (P) Jul 12 $14,71, up 0.5 cent +0.03%

Soybeans (P) Aug 12 $14,56, up 0.5 +0.03%

Soybeans (P) Sep 12 $14,26, up 0.25 +0.02%

Soybeans (P) Nov 12 $14,12, down 1.25 -0.09%

Corn (P) Jul 12 $6.495, up 3.5 +0.54%

Corn (P) Sep 12 $6.275, up 8.0 +1.29%

Corn (P) Dec 12 $6.33, up 9.0 +1.44%

Oats (P) Jul 12 $3.4775, down 11.0 -3.07%

Oats (P) Sep 12 $3.375, up 8.25 +2.51%

Oats (P) Dec 12 $3.4525, up 18.25 +5.58%

Minneapolis (per bushel)

Spring Wheat Jul 12 $8.4425, down 8.756 cents -1.03%

Spring Wheat Sep 12 $8.3525, up 8.75 +1.06%

Spring Wheat Dec 12 $8.405, up 7.75 +0.93%

Spring Wheat Mar 13 $8.47, up 7.25 +0.86%

Nearby crude oil futures in New York rose 85 cents $80.21 per barrel.

The Bank of Canada noon dollar rate was 97.49 cents US, little changed from 97.42 the day before.

The U.S. dollar was $1.0257 Cdn.

In early tallies:

The Toronto Stock Exchange’s S&P/TSX composite index closed at 76.52 points, or 0.68 percent, at 11,410.94.

The Dow Jones industrial average was up 94.04 points, or 0.75 percent, at 12,628.71.

The Standard & Poor’s 500 Index rose 12.13 points, or 0.92 percent, at 1,332.12.

The Nasdaq Composite Index was up 23.35 points, or 0.82 percent, at 2,877.41.

The StatsCan report put all wheat area at 23.81 million acres, very close to 23.9 million acres forecast in the Reuters traders’ survey. Last year’s all-wheat number was 21.46 million acres.

Of that spring wheat area is 17.04 million acres, up from last year’s 15.76 million.

Durum area in the report is 4.71 million acres, a little less than the Reuters survey of 4.9 million. That is up from last year’s 4.02 million.

Winter wheat area is pegged at 2.07 million acres, up from last year’s 1.69 million.

Pea area in today’s report is 3.5 million acres, up a little from pre report estimates and up from last year’s 2.33 million.

Oats are pegged at 3.07 million, a little less than pre report expectations and down from 3.11 million last year.

Lentil acreage is 2.61 million, similar to last year’s 2.57 million.

Flaxseed acreage is 1.07, similar to the pre report guesses but up 54 percent from last year’s 695,000 seeded area.

Summerfallow area is 3.86 million acres, even less than the exceptionally low 3.97 million that farmers said they would fallow in StatsCan’s March seeding intentions report. In 2011 there were 12.41 million acres summerfallowed, a particularly large area because of excess moisture.