Short covering and expectations that USDA will cut its U.S. corn, soybean and spring wheat planted acreage numbers pushed grain markets higher Wednesday.
Big funds that held a lot of short (sold) positions decided it was time to hedge bets and increase long (bought) positions.
The gains broke though some resistance points and gained technical momentum.
U.S. Federal Reserve Chair Ben Bernanke said the bank intends to start scaling back it s $85 billion bond buying stimulus program later this year and end it in mid 2014 if the economy continues to rebound.
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USDA attaché sees Canadian wheat production holding firm
All wheat production in Canada is to remain relatively steady in 2025/26 said the United States Department of Agriculture attaché in Ottawa. In the report released on July 28, they forecast 35.15 million tonnes compared to 34.96 million in 2024/25.
• Some forecast models indicate sharply higher temperatures in the Midwest at the end of June and early July, which would stress corn and soybeans. But the models do not agree so there could be changes to the forecast in coming days.
Corn gains were limited by a build up of U.S. ethanol stocks.
• On a technical point, corn has now filled in the gap between March 28 and April 1 created when markets fell following a USDA report that showed March 1 corn stocks were higher than expected. The gap was created when corn opened Monday April 1 much lower than it had closed on Friday March 28, the day of the report
• Private analyst Informa Economics lowered its U.S. corn, soybean and spring wheat seeded area outlooks today, but the corn number was a bit higher than some more bullish firms.
It pegged corn area at 95.262 million acres, down from its previous forecast of 96.827 million. USDA’s forecast is 97.282 million, but it will update that number June 28, Reuters reported.
Informa forecast soybean area at 77.756 million acres, down from 78.286 million. USDA’s number is 77.126 million. This was viewed as supportive to prices.
Informa’s spring wheat number is 11.791 million acres, down from 12.401 million previously. USDA’s forecast is 12.701 million acres.
It pegged durum acres at 1.75 million.
• Crop forecaster Lanworth lowered its expectations for world corn and soybean production mostly due to reduced U.S. crops because of excess moisture in the Midwest.
Lanworth pegged the world corn new crop at 957 million tonnes and soybean production of 284 million tonnes, down from its earlier forecasts for 961 million tonnes and 286 million tonnes, respectively.
Its wheat forecast is 693 million tonnes, down from 694 million.
• China bought about 200,000 tonnes of wheat from France, adding to the perception that China could buy more wheat than expected this year to rebuild stocks.
Wheat was also supported by views that, given tight corn supplies this summer until harvest, livestock feeders will turn to cheaper wheat
• After falling since March and being at a fairly low level since the start of 2012 the Baltic Dry Index, a measure of ocean shipping costs, has risen sharply in recent days but remains fairly low compared to several years ago. The rally appears to be sparked by Chinese users buying iron ore at what is expected to be a market bottom and booking vessels to ship it.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jul 2013 608.70 +3.50 +0.58%
Canola Nov 2013 558.90 +5.00 +0.90%
Canola Jan 2014 563.10 +7.10 +1.28%
Canola Mar 2014 562.40 +8.20 +1.48%
Canola May 2014 559.30 +8.10 +1.47%
Milling Wheat Jul 2013 294.00 unch 0.00%
Milling Wheat Oct 2013 294.00 unch 0.00%
Milling Wheat Dec 2013 294.00 unch 0.00%
Durum Wheat Jul 2013 301.90 unch 0.00%
Durum Wheat Oct 2013 294.90 unch 0.00%
Durum Wheat Dec 2013 299.40 unch 0.00%
Barley Jul 2013 244.00 unch 0.00%
Barley Oct 2013 194.00 unch 0.00%
Barley Dec 2013 199.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jul 2013 1523 +12.25 +0.81%
Soybeans Aug 2013 1447 +11.5 +0.80%
Soybeans Sep 2013 1352.75 +15.5 +1.16%
Soybeans Nov 2013 1310.75 +21 +1.63%
Soybeans Jan 2014 1314.75 +19.5 +1.51%
Soybeans Mar 2014 1312.5 +17.25 +1.33%
Soybean Meal Jul 2013 453.6 +1.8 +0.40%
Soybean Meal Aug 2013 426.5 +3.8 +0.90%
Soybean Meal Sep 2013 406.1 +4.5 +1.12%
Soybean Oil Jul 2013 49.35 +0.54 +1.11%
Soybean Oil Aug 2013 49.29 +0.53 +1.09%
Soybean Oil Sep 2013 48.93 +0.52 +1.07%
Corn Jul 2013 682.25 +9 +1.34%
Corn Sep 2013 610 +21 +3.57%
Corn Dec 2013 570.5 +20 +3.63%
Corn Mar 2014 581.25 +20 +3.56%
Corn May 2014 588.25 +19.75 +3.47%
Oats Jul 2013 403.25 +5.5 +1.38%
Oats Sep 2013 392.5 +3.75 +0.96%
Oats Dec 2013 390 +2.25 +0.58%
Oats Mar 2014 394.25 +4.25 +1.09%
Oats May 2014 396.5 +4.25 +1.08%
Wheat Jul 2013 707 +19.5 +2.84%
Wheat Sep 2013 714.25 +19.5 +2.81%
Wheat Dec 2013 727 +19 +2.68%
Wheat Mar 2014 741 +19.25 +2.67%
Wheat May 2014 751.25 +19 +2.59%
Minneapolis
Spring Wheat Jul 2013 813.5 +14.5 +1.81%
Spring Wheat Sep 2013 794.75 +14.5 +1.86%
Spring Wheat Dec 2013 803.5 +15 +1.90%
Spring Wheat Mar 2014 816 +14.25 +1.78%
Spring Wheat May 2014 822.5 +13.25 +1.64%
Kansas City
KCBT Red Wheat Jul 2013 739.75 +20.5 +2.85%
KCBT Red Wheat Sep 2013 740.5 +19 +2.63%
KCBT Red Wheat Dec 2013 755.5 +18.5 +2.51%
KCBT Red Wheat Mar 2014 768.5 +18.5 +2.47%
KCBT Red Wheat May 2014 776.75 +18.5 +2.44%
Light crude oil nearby futures in New York dropped 20 cents at $98.24 US per barrel.
The Canadian dollar at noon was 98.16 cents US, up from 97.95 cents the previous trading day. The U.S. dollar at noon was $1.0187 Cdn.
In early unofficial tallies —
The TSX composite closed down 99.17 points or 0.80 percent at 12,268.29.
The Dow Jones industrial average fell 205.66 points, or 1.34 percent, at 15,112.57.
The Standard & Poor’s 500 Index fell 22.88 points, or 1.39 percent, at 1,628.93.
The Nasdaq Composite Index fell 38.98 points, or 1.12 percent, at 3,443.20.
