Canola and soybean futures rose on Wednesday, supported by concerns about dry weather in Brazil and Paraguay.
Exporter buying also provided good support to canola. March canola closed at $547.80 per tonne, up $5.90.
Forecasts call for dry weather to continue in southern Brazil for the rest of this week. Rain in Argentina has stopped crop deterioration there.
Soybeans rose Wednesday on new sales to China and the expectation that an announcement on futures sales would be signed while China’s vice president Xi Jinping visits the U.S.
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Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
If they buy more than what could be considered a polite gesture, then it is clear that China too is worried about the dry weather in Brazil. It will be particularly big deal if they also buy corn.
• The U.S. dollar rose against many currencies.
• Chicago corn and wheat fell. Wheat continues under pressure from ample supplies. Ukraine’s government today said it has no intention to limit exports despite crop damage from last fall’s drought and bitter cold this winter. Corn dipped below a technical support level, triggering some selling.
• There is a belief that U.S. ethanol makers are slightly cutting production to reduce supplies that have increased by more than 3.5 million barrels, or nearly 20 percent, since the beginning of the year.
Demand from U.S. fuel blenders slowed with the expiration of a 45-cent-per-gallon tax credit.
• Farmfutures.com today quotes João Carlos Kopp, a market analyst and consultant working with farmers in Brazil, saying that soybean and corn crops in South American crop will likely be substantially smaller than what USDA currently forecasts.
If this proves true, it would add substantial support to corn and soybean prices.
Unless there is a big change to wetter weather, Kopp forecasts Brazil’s soybean crop at 65 million tonnes, down from current USDA forecast of 72 million and corn at about 51 million tonnes, down from USDA’s forecast of 61 million. He adds that if the dry weather continues, a worst-case scenario is corn production of only 45 million tonnes
He sees Argentina’s soybean crop at 45 million tonnes and corn at about 18 million tonnes. USDA forecasts 48 million tonnes of soybeans and 22 million tonnes of corn.
• The export capacity of a key port terminal in Brazil has been temporarily reduced after a ship collided with a soybean loader, destroying it. Export movement is currently light and the damage is not causing much harm now, but if repair drag into March when harvest and exports pick up, it could become an issue.
Winnipeg (per tonne)
Canola Mar 12 $547.80, up $5.90 (+1.09%)
Canola May 12 $551.60, up $5.80 (+1.06%)
Canola Jul 12 $554.50, up $5.00 (+0.91%)
Canola Nov 12 $529.50, up $3.30 (+0.63%)
The previous trading day’s best basis was $5.27 per tonne off the March contract, said the ICE Futures Canada exchange in Winnipeg.
The 14-day relative strength index was 69.
Western Barley Mar 12 $212.00, unchanged
Western Barley May 12 $217.00, unchanged
Milling Wht Oct 12 $264.00, up $2.50 (+0.96%)
Milling Wht Dec 12 $268.50, up $2.50 (+0.94%)
Milling Wht Mar 13 $273.50, up $2.50 (+0.92%)
Durum Wht Oct 12 $265.90, up $0.70 (+0.26%)
Durum Wht Dec 12 $270.40, up $0.70 (+0.26%)
Durum Wht Mar 13 $276.60, unchanged
Barley Oct 12 $182.00, up $1.50 (+0.83%)
Barley Dec 12 $185.50, up $1.50 (+0.82%)
Barley Mar 13 $187.00, up $1.50 (+0.81%)
Chicago (per bushel)
Soybeans Mar 12 $12.61, up 6.0 cents (+0.48%)
Soybeans May 12 $12.6875, up 6.25 (+0.50%)
Soybeans Nov 12 $12.605, up 3.0 (+0.24%)
Corn Mar 12 $6.27, down 6.5 (-1.03%)
Corn May 12 $6.31, down 7.0 (-1.10%)
Corn Dec 12 $5.5975, down 4.5 (-0.80%)
Oats Mar 12 $3.245, up 1.25 (+0.39%)
Oats May 12 $3.18, up 3.25 (+1.03%)
Oats Dec 12 $3.165, up 0.25 (+0.08%)
Minneapolis (per bushel)
Spring Wht Mar 12 $8.11, down 1.0 cent (-0.12%)
Spring Wht May 12 $8.0375, up 0.5 (+0.06%)
Spring Wht Dec 12 $7.7225, down 4.75 (-0.61%)
Nearby light crude oil in New York settled at $101.80 a barrel, up $1.06.
The Canadian dollar at noon was $1.0035 US, up from $1.0009 the previous trading day. The U.S. dollar at noon was 99.65 cents Cdn.
In an early tally, the Toronto Stock Exchange composite closed up 7.56 points, or 0.06 percent, at 12,362.03.
The Dow Jones industrial average unofficially was down 97.11 points, or 0.75 percent, at 12,781.17. The Standard & Poor’s 500 Index was down 7.25 points, or 0.54 percent, at 1,343.25. The Nasdaq Composite Index fell 16.00 points, or 0.55 percent, at 2,915.83.
