Canola and soybeans drifted lower Wednesday on generally good growing conditions.
The CWB crop tour continues. To summarize, crops are highly variable with conditions generally better in the west than in the east, with perhaps the best crops in center west and northwest Saskatchewan.
The tour will publish yield forecasts on Thursday, but my read of the anecdotal reports is that Prairie-wide average yields could be close to the long term norm or perhaps a little above average, with cereals doing better than canola.
The warm weather is advancing maturity.
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Canola basis in many areas is positive — a big change from a few months ago.
What is causing it? Spring surge in crop movement reduced carryover in eastern Prairies. Excess moisture reduced production prospects on eastern Prairies. Farmers are holding back some supply to ensure they have something to sell in 2014-15.
Strong basis is helped to make up for a futures price that is very unattractive. New crush capacity has come on stream (Richardson Yorkton).
Maybe we can keep up the strong pace of canola exports into the new crop year?
Agriculture Canada in July forecasts carry over at the end of 2014-15 at 1.1 million tonnes, down from three million at end of 2013-14.
Back in May the forecast for end of 2013-14 was 3.25 million and for end of 2014-15 was 1.95 million
Statements from the U.S. Federal Reserve and a surprisingly strong second quarterly U.S. gross domestic product report caused the U.S. buck to rise against other currencies, including the loonie.
Rain forecast for next week in Midwest is expected to keep corn and soybeans in great shape.
Soybeans and soy oil fell on the expectation of ample supply.
Wheat rose on bargain buying and a sale of U.S. wheat to Nigeria.
Also, there was speculation that the new sanctions that the U.S., Canada and European Union have placed on Russia might make it harder for Russian sellers to get financing for wheat sales. So far, the conflict and previous sanctions have not affected production or exports.
Rain in France and Germany is hurting the quality of the large wheat crop there. But wheat production forecasts for Russia and Ukraine are edging higher.
Corn edged up a penny or two on support from wheat.
Parts of China near Beijing, including Henan and the Yellow River basin are very dry and that has potential to trim corn production. However, China’s corn reserves are large.
U.S. GDP in the second quarter rose at a four percent annual rate (analysts expected three percent) and the first quarter was revised to a negative 2.1 percent (formerly minus 2.9 percent).
The statement from the Fed said that inflation is moving up closer to its two percent target. The employment rate is improving, but there is still “significant underutilization of labor resources.”
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2014 442.80 -1.30 -0.29%
Canola Jan 2015 446.40 -1.90 -0.42%
Canola Mar 2015 446.90 -2.10 -0.47%
Canola May 2015 443.20 -2.10 -0.47%
Canola Jul 2015 438.80 -2.10 -0.48%
Milling Wheat Oct 2014 187.00 +1.00 +0.54%
Milling Wheat Dec 2014 193.00 +1.00 +0.52%
Milling Wheat Mar 2015 194.00 +1.00 +0.52%
Durum Wheat Oct 2014 250.00 unch0.00%
Durum Wheat Dec 2014 256.00 unch0.00%
Durum Wheat Mar 2015 257.00 unch0.00%
Barley Oct 2014 137.50 unch0.00%
Barley Dec 2014 139.50 unch0.00%
Barley Mar 2015 140.50 unch0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Aug 20141220.5 -6 -0.49%
Soybeans Sep 20141102.25 -19.25 -1.72%
Soybeans Nov 20141081.25 -13.75 -1.26%
Soybeans Jan 2015 1089 -13.25 -1.20%
Soybeans Mar 20151095.75 -12.5 -1.13%
Soybeans May 20151102.5 -11.5 -1.03%
Soybean Meal Aug 2014 387.6 -7.8 -1.97%
Soybean Meal Sep 2014 361.5 -7.7 -2.09%
Soybean Meal Oct 2014 351.4 -5.9 -1.65%
Soybean Oil Aug 2014 36.05 -0.2 -0.55%
Soybean Oil Sep 2014 36.15 -0.19 -0.52%
Soybean Oil Oct 2014 36.21 -0.17 -0.47%
Corn Sep 2014361.75 +0.25 +0.07%
Corn Dec 2014371.5 +0.5+0.13%
Corn Mar 2015383.5 +0.5+0.13%
Corn May 2015391.5 +0.25 +0.06%
Corn Jul 2015 399.25 +0.25 +0.06%
Oats Sep 2014353.5 -3 -0.84%
Oats Dec 2014329.75 -3.5 -1.05%
Oats Mar 2015317.25 -1.5 -0.47%
Oats May 2015307.5 -5.5 -1.76%
Oats Jul 2015 309 -2.5 -0.80%
Wheat Sep 2014 527.25 +7.25 +1.39%
Wheat Dec 2014 549.5 +5.75 +1.06%
Wheat Mar 2015 572.75 +4.5+0.79%
Wheat May 2015 586.75 +3.25 +0.56%
Wheat Jul 2015 597.5 +3.5+0.59%
Minneapolis
Spring Wheat Sep 2014 612.75 +2.25 +0.37%
Spring Wheat Dec 2014 623 +2.25 +0.36%
Spring Wheat Mar 2015 636.25 +2.25 +0.35%
Spring Wheat May 2015 644.25 +2 +0.31%
Spring Wheat Jul 2015 652 +2.5+0.38%
Kansas City
Hard Red Wheat Sep 2014 617 +5.5+0.90%
Hard Red Wheat Dec 2014 632.25 +4 +0.64%
Hard Red Wheat Mar 2015 639.75 +4.25 +0.67%
Hard Red Wheat May 2015 643.5 +3.75 +0.59%
Hard Red Wheat Jul 2015633.25 +0.75 +0.12%
Light crude oil nearby futures in New York dropped 70 cents at $100.27 US per barrel.
The Canadian dollar at noon was 91.67 cents US, down from 92.16 cents the previous trading day. The U.S. dollar at noon was $1.0909 Cdn.
In early tallies —
The Toronto Stock Exchange’s S&P/TSX composite index closed up 78.27 points, or 0.51 percent, at a new record high of 15,524.82.
The Dow Jones industrial average fell 31.69 points or 0.19 percent, to 16,880.42.
The S&P 500 gained 0.18 points or 0.01 percent, to 1,970.13.
The Nasdaq Composite added 20.20 points or 0.45 percent, to 4,462.90
