Wheat futures jumped higher Wednesday with Minneapolis March topping $10 per bushel, pulling oilseeds and corn up too.
The main factors in the crop markets were the huge snowstorm in the United States and uncertainty about the future course of the political upheaval in Egypt, the world’s largest wheat buyer.
The snow and cold in the U.S. disrupted cash trade and caused traders to think that feed demand will increase as animals have to eat more to keep up with the additional calories they are burning to keep warm.
There was much less snow on the western side of the hard red winter wheat region and, with morning temperatures falling well below the freezing point, worries are rising that there will be winterkill.
There is no clear indication what will happen in Egypt. Supporters of president Hosni Mubarak clashed with demonstrators who have called for him to resign immediately. Mubarak said yesterday he would not run for re-election in a vote this fall.
Reuters reported that sources say that Egypt’s ports are mostly at a standstill because of the demonstrations, but the newly appointed trade minister said a plan is being developed to ensure that food and other vital goods are distributed from warehouses.
There are concerns that the political upheavals affecting several North African and Middle Eastern states will spread to other countries in the region. There is also potential for disruptions to shipping in the Suez Canal, a key trade corridor for crude oil.
Oilseed prices were supported by gains in palm oil futures, driven higher by heavy rain in Malaysia that has disrupted transportation.
Limiting the gains was word from Argentina that the port workers strike is suspended. The government on Tuesday ordered the unions to shut down picket lines for 15 days and negotiate with employers.
Canola traders are preparing for the Statistic Canada grain stocks report on Friday morning.
In Winnipeg, March canola rose $3 to $612 per tonne on 10,015 trades.
May rose $2.70 to $620.40 on 3,094 trades.
The new crop November 2011 contract rose $3.50 to $584.80.
The previous day’s best basis narrowed to $12.80 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 68. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Other technical indicators, such a short and longer term moving averages, show that canola is in a very strong technical position.
March barley futures were steady and untraded at $194. May was steady at $200 per tonne.
Chicago March soybeans rose six cents to $14.44 per bushel.
March corn rose 3.25 cents to $6.6925 per bu.
March oats rose 16 cents to $4.135 per bu.
March Minneapolis hard spring wheat jumped 29.25 cents to $10.1025 per bu.
In New York, crude oil for March delivery rose nine cents to $90.86 US per barrel. Brent crude is over $102 per barrel.
The Canadian dollar at noon was $1.0118 US, up from 1. 0079 the previous trading day. The U.S. dollar at noon was 98.83 cents Cdn.
The Toronto Stock Exchange composite index fell 32.33 points to 13,680.29.
A U.S. report showed private employers added more jobs than expected last month.
The Standard & Poor’s 500 Index fell 3.03 points to 1,304.56.
