Canola, soybeans lower on big crop expectations

By D’Arce McMillan

Markets editor

Twitter @ darcemcmillan

Canola declined about 1.5 percent Wednesday, dragged down by the falling soy complex and profit taking after the strong gains early in the week.

Corn edged higher again as did Chicago wheat but Minneapolis and Kansas wheat declined slightly.

The early week rally in oilseeds was difficult to sustain with a large Canadian canola crop and a record American soybean crop being harvested.

Spread trading between corn and soybeans added extra weight on soybeans. The expectation is that the USDA’s supply and demand report on Friday will increase the soybean production estimate more than the corn estimate.

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Crude oil fell again on ample world supply and that also weighed on oilseeds.

Support for crop prices comes from the concern that frost last weekend may have damaged some immature corn and soybeans in the northern Midwest. Also rain is forecast for Thursday and Friday in the southern Midwest and the southern Plains.

It will interfere with harvest in the Midwest, but the moisture will be welcome in the Plains where farmers are seeding hard red winter wheat into soil that was dry.

Wheat has enjoyed support from the belief among some analysts that Russian wheat was being priced out of the market. The idea was that with Russia banning food imports from countries that had imposed sanctions over its aggression in Ukraine, more grain would be used domestically to feed livestock.

However, a story at Agrimoney.com quoting analyst SovEcon and others dismissed the notion that Russia’s wheat exports would be substantially reduced. SovEcon said the only about 11 million tonnes of an exportable surplus of 30 million tonnes of grain had been shipped so far. With the Russian ruble weakening, Russia would soon be competitive again in the global market, said SovEcon managing director Andrey Sizov Jr. in the Agrimoney.com story.

SovEcon said the bigger story in the Russian market is that it is dry in all the country’s major growing regions. If that continues, it will interfere with crop emergence.

As stated, the USDA posts its updated supply and demand outlooks on Friday.

The average of analysts’ corn crop forecasts, as polled by Reuters, is a record 14.506 billion bushels. USDA’s September forecast was 14.395 billion.

The average of the Reuters poll for soybeans is 3.976 billion bu., up from the September forecast of 3.913 billion.

ICE Futures Canada adjusted the untraded durum contract price up by $20 a tonne to reflect the tight supply and good demand for milling durum.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014 406.30 -6.60 -1.60%

Canola Jan 2015 412.70 -6.50 -1.55%

Canola Mar 2015 419.70 -6.30 -1.48%

Canola May 2015 425.20 -6.40 -1.48%

Canola Jul 2015 429.20 -6.40 -1.47%

Milling Wheat Oct 2014 211.00 -1.00 -0.47%

Milling Wheat Dec 2014 215.00 -1.00 -0.46%

Milling Wheat Mar 2015 224.00 unch 0.00%

Durum Wheat Oct 2014 340.00 +20.00 +6.25%

Durum Wheat Dec 2014 346.50 +20.00 +6.13%

Durum Wheat Mar 2015 347.50 +20.00 +6.11%

Barley Oct 2014 115.50 -1.00 -0.86%

Barley Dec 2014 117.50 -1.00 -0.84%

Barley Mar 2015 120.50 unch 0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago

Soybeans Nov 2014 935 -5.75 -0.61%

Soybeans Jan 2015 943.5 -5.75 -0.61%

Soybeans Mar 2015 952 -6.25 -0.65%

Soybeans May 2015 960.5 -5.75 -0.60%

Soybeans Jul 2015 967.75 -4.25 -0.44%

Soybeans Aug 2015 970.5 -4 -0.41%

Soybean Meal Oct 2014 329.8 +2.8 +0.86%

Soybean Meal Dec 2014 309.8 -2.8 -0.90%

Soybean Meal Jan 2015 308 -3.1 -1.00%

Soybean Oil Oct 2014 32.88 -0.08 -0.24%

Soybean Oil Dec 2014 33.02 -0.08 -0.24%

Soybean Oil Jan 2015 33.3 -0.07 -0.21%

Corn Dec 2014 343.25 +2.75 +0.81%

Corn Mar 2015 356.5 +3 +0.85%

Corn May 2015 365.25 +3 +0.83%

Corn Jul 2015 373.25 +3.25 +0.88%

Corn Sep 2015 380.75 +2.75 +0.73%

Oats Dec 2014 343.25 -8 -2.28%

Oats Mar 2015 328.25 -5.5 -1.65%

Oats May 2015 323 -5.5 -1.67%

Oats Jul 2015 318.5 -3.5 -1.09%

Oats Sep 2015 325 +0.25 +0.08%

Wheat Dec 2014 507.75 +1.5 +0.30%

Wheat Mar 2015 519.25 +0.75 +0.14%

Wheat May 2015 526 +0.5 +0.10%

Wheat Jul 2015 534 +0.5 +0.09%

Wheat Sep 2015 545.5 unch 0.00%

Minneapolis

Spring Wheat Dec 2014 565 -0.5 -0.09%

Spring Wheat Mar 2015 578.75 -1 -0.17%

Spring Wheat May 2015 588.25 -1.25 -0.21%

Spring Wheat Jul 2015 598 -2 -0.33%

Spring Wheat Sep 2015 608.5 -2.5 -0.41%

Kansas City

Hard Red Wheat Dec 2014 586.5 -1.75 -0.30%

Hard Red Wheat Mar 2015 589 -0.75 -0.13%

Hard Red Wheat May 2015 591 -1.25 -0.21%

Hard Red Wheat Jul 2015 586 -1 -0.17%

Hard Red Wheat Sep 2015 597.75 -1 -0.17%

Light crude oil nearby futures in New York dropped $1.54 at $87.31 US per barrel.

The Canadian dollar at noon was 89.43 cents US, unchanged from the previous trading day. The U.S. dollar at noon was $1.1182 Cdn.

Early in the day the TSX was down on the falling oil price and the outlook for weak global economic growth.

But stock markets rallied after the minutes from the September U.S. Federal Reserve meeting were released.

The minutes indicated that the Fed is concerned about the slowing pace of global economic growth and might not be in a rush to start increasing interest rates. The wording in the next Fed report might have more emphasis on tying any interest rate increase to data confirming economic growth, and dropping any reference to a time frame for rate increases.

The TSX closed up 90.03 points o 0.62 percent at 14,666.47.

The Dow Jones industrial average rose 273.03 points, or 1.63 percent, to 16,992.42, the S&P 500 surged 33.56 points, or 1.73 percent, to 1,968.66 and the Nasdaq Composite added 83.39 points, or 1.9 percent, to 4,468.59.