Canola up on technical momentum; U.S. crops little changed

Investment funds that held short positions in canola futures scrambled to cover their position on Wednesday as the contract held above key technical levels.

The fund buying in canola helped propel futures to close higher despite losses in most U.S. crop markets.

Although the Ukraine situation is still uncertain, the tension did not increase much today and so there was no new impact on grain markets.

The gain in canola today appeared to be mostly a technical rally with lingering support from early week gains in vegetable oil values and the generally grains rally. The fundamental situation in canola has changed little with transportation problems still bedeviling the canola sector, along with other Canadian grains.

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May and new crop November soybean contracts were pressured lower by news that China had cancelled a deal to buy 245,000 tonnes of U.S. supply. The market has been expecting this as Brazilian supplies are starting to become available.

Soy oil fell, partly on lower crude oil futures. The fall was limited by strong palm oil values, which are supported by concerns about dry weather in South East Asia and by a bullish outlook by influential analyst Dorab Mistry at a major palm meeting in Malaysia.

Analysts have been trimming the outlook for Argentina’s soybean crop recently. After a dry start, the crop was stressed by excess rain in February. It rained more this week, increasing concerns about damage from disease. However, drier weather is expected next week, which should help the crops to mature and move toward harvest.

Spring wheat was the other solid performer, with the March contract rising 1.67 percent. But new crop December climbed only 0.18 percent.

Chicago wheat closed slightly lower across the board while May Kansas closed fractionally higher.

Oats futures took it on the chin today, with March opening at $5.41 US per bushel but then falling 3.83 percent to close at $5.21 ¼. December fell 2.16 percent.

That very strong oats futures price is caused by the Canadian logistics problem and is not reflected in Canadian cash prices.

Corn also edged lower on profit taking and farmer selling.

Analyst Strategie Grains this week slightly increased for the second straight month its forecast for this year’s rapeseed harvest in the European Union, as it raised its outlook for Poland and left yields unchanged in Britain and France despite soggy conditions.

EU rapeseed production is now projected at 21.5 million tonnes, up from 21.4 million tonnes estimated last month, Strategie Grains said in a monthly report, a Reuters story said.

The new outlook for the 2014 crop was above last year’s production although Strategie Grains also revised upwards its 2013 estimate to 21.1 million from 20.9 million.

Winnipeg ICE Futures Canada dollars per tonne

Canola Mar 2014 443.60 +2.90 +0.66%

Canola May 2014 451.70 +2.80 +0.62%

Canola Jul 2014 461.30 +2.70 +0.59%

Canola Nov 2014 477.90 +2.80 +0.59%

Canola Jan 2015 485.30 +2.70 +0.56%

Milling Wheat Mar 2014 204.00 +4.00 +2.00%

Milling Wheat May 2014 205.00 unch 0.00%

Milling Wheat Jul 2014 205.00 unch 0.00%

Durum Wheat Mar 2014 245.00 unch 0.00%

Durum Wheat May 2014 249.00 unch 0.00%

Durum Wheat Jul 2014 250.00 unch 0.00%

Barley Mar 2014 126.50 unch 0.00%

Barley May 2014 128.50 unch 0.00%

Barley Jul 2014 128.50 unch 0.00%

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

Chicago

Soybeans Mar 2014 1420 +2 +0.14%

Soybeans May 2014 1420.5 -2.5 -0.18%

Soybeans Jul 2014 1395.25 -1.25 -0.09%

Soybeans Aug 2014 1346 +1 +0.07%

Soybeans Sep 2014 1244.75 -3 -0.24%

Soybeans Nov 2014 1179.75 -1.5 -0.13%

Soybean Meal Mar 2014 457.7 -1.1 -0.24%

Soybean Meal May 2014 449.6 -0.1 -0.02%

Soybean Meal Jul 2014 438.8 +1.5 +0.34%

Soybean Oil Mar 2014 43.18 -0.28 -0.64%

Soybean Oil May 2014 43.4 -0.31 -0.71%

Soybean Oil Jul 2014 43.54 -0.27 -0.62%

Corn Mar 2014 475.25 -1.5 -0.31%

Corn May 2014 482 -2.25 -0.46%

Corn Jul 2014 486.25 -2 -0.41%

Corn Sep 2014 482.75 -2.5 -0.52%

Corn Dec 2014 483.25 -3.25 -0.67%

Oats Mar 2014 521.25 -20.75 -3.83%

Oats May 2014 473.5 -20 -4.05%

Oats Jul 2014 397.75 -13.25 -3.22%

Oats Sep 2014 346.75 -9 -2.53%

Oats Dec 2014 339 -7.5 -2.16%

Wheat Mar 2014 637.25 -2.5 -0.39%

Wheat May 2014 642.5 -1 -0.16%

Wheat Jul 2014 646 -1 -0.15%

Wheat Sep 2014 653.75 -0.75 -0.11%

Wheat Dec 2014 665.75 -1 -0.15%

Minneapolis

Spring Wheat Mar 2014 701.5 +11.5 +1.67%

Spring Wheat May 2014 688.75 +3.25 +0.47%

Spring Wheat Jul 2014 686.25 +2.5 +0.37%

Spring Wheat Sep 2014 691 +1.75 +0.25%

Spring Wheat Dec 2014 700.25 +1.25 +0.18%

Kansas City

KCBT Red Wheat Mar 2014 703.25 -1 -0.14%

KCBT Red Wheat May 2014 710.25 +0.75 +0.11%

KCBT Red Wheat Jul 2014 703 +0.75 +0.11%

KCBT Red Wheat Sep 2014 708.5 +0.75 +0.11%

KCBT Red Wheat Dec 2014 718.75 -0.5 -0.07%

Light crude oil nearby futures in New York dropped $1.88 at $101.45 US per barrel.

The Canadian dollar at noon was 90.49 cents US, up from 89.98 cents the previous trading day. The U.S. dollar at noon was $1.1051 Cdn.

In early unofficial tallies —

The Toronto Stock Exchange’s S&P/TSX composite index closed up 14.31 points, or 0.10 percent, at 14,304.17.

The Dow Jones industrial average fell 31.78 points or 0.19 percent, to 16,364.1.

The S&P 500 inched up just 0.02 of a point to 1,873.93.

The Nasdaq Composite added 6.002 points or 0.14 percent, to close unofficially at 4,357.974.

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