Canola, wheat rally Friday on short covering and weather worries

Canola rallied Friday on chart support, short covering and on rising soy oil.

The July contract is now at a slight premium over the November.

July canola ended at $463.00 per tonne, up $3.50 or 0.76 percent from the day before.

November closed at $462.10, also up $3.50.

For the week, July climbed $4.70 or one percent while November fell $2.80 or 0.6 percent.

Lack of farmer selling has supported the old crop price, but new crop has been under pressure from thoughts that the Prairie crop is developing well despite cool nights and unseeded acres in some areas due to excess moisture.

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Good conditions for the rapidly seeded U.S. soybean crop and production forecast upgrades for European rapeseed also limit the upside for canola.

There might have been some light frost in central Alberta early Friday morning and temperatures near the freezing point are a possibility for early Saturday morning in Saskatchewan.

Soy oil rallied this week on short covering after the price flirted with the contract low set at the end of January.

But there was no help from Malaysian palm oil prices, which fell this week on concern about slow exports and a stronger Malaysian currency.

The slowing pace of canola crush also did nothing for prices.

The Canadian Oilseed Processors Association said members crushed 108,199 tonnes of canola in the week ending June 4, down 6.6 percent from the week before. Last week the crush was down almost 24 percent.

In the latest week, the industry capacity use was only about 61 percent. One factor might be the Cargill Clavet, Sask., plant. It posted no price today saying it was full. There might be maintenance going on.

There was a strong rally in wheat futures today, particularly in Kansas hard red winter contracts. The trade is worried that excess rain this week in the southern Plains could harm crop quality. Harvest has just begun in Texas and Oklahoma and would have moved into Kansas in the next few days but the rain will stall cutting.

The rally in Chicago soft wheat was less strong. Generally, wheat has been under pressure because the trade thinks global wheat supplies this year will be ample.

However, there was talk again today about hot, dry weather in Russia. The focus of concern is the Volga River region. Kazakhstan is also dry.

Corn rallied more than two percent today, offsetting losses earlier in the week. Strength today was from short covering and from the rising wheat market.

July soybeans were down a little, but November climbed. July soybeans were down 2.8 percent from the previous Friday close.

July corn over the week was down 1.3 percent.

Minneapolis spring wheat July on the week climbed 0.4 percent and new crop December edged up 0.2 percent.

Reuters reported the U.S. Environmental Protection Agency signaled it will need more time to complete long-delayed targets for the use of renewable fuels in 2014.

Today it extended its deadline for refiners to show compliance with the 2013 federal biofuel use mandate to Sept. 30, Reuters reported. It said a three-month extension was necessary because refiners need to know their 2014 obligations before they can determine how many biofuel credits they may need to carry over from 2013 to comply with this year’s requirements.

USDA will issue its monthly supply and demand reports on June 11.

The average of a Reuters poll of traders looking at the U.S. winter wheat crop was 1.394 billion bushels with the range of 1.330 to 1.445 billion.

USDA’s May report pegged the crop at 1.403 billion bu.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jul 2014 463.00 +3.50 +0.76%

Canola Nov 2014 462.10 +3.50 +0.76%

Canola Jan 2015 467.60 +3.30 +0.71%

Canola Mar 2015 470.40 +3.40 +0.73%

Canola May 2015 472.40 +3.40 +0.72%

Milling Wheat Jul 2014 210.00 +6.00 +2.94%

Milling Wheat Oct 2014 211.00 +6.00 +2.93%

Milling Wheat Dec 2014 215.00 +6.00 +2.87%

Durum Wheat Jul 2014 251.00 unch 0.00%

Durum Wheat Oct 2014 242.00 unch 0.00%

Durum Wheat Dec 2014 244.00 unch 0.00%

Barley Jul 2014 145.00 unch 0.00%

Barley Oct 2014 145.00 unch 0.00%

Barley Dec 2014 147.00 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 2014 1457 -3.5 -0.24%

Soybeans Aug 2014 1401 +0.75 +0.05%

Soybeans Sep 2014 1263.75 +4.75 +0.38%

Soybeans Nov 2014 1218.75 +8.25 +0.68%

Soybeans Jan 2015 1225 +8 +0.66%

Soybeans Mar 2015 1230 +8 +0.65%

Soybean Meal Jul 2014 487.6 -3 -0.61%

Soybean Meal Aug 2014 461.7 -1.9 -0.41%

Soybean Meal Sep 2014 424.1 unch 0.00%

Soybean Oil Jul 2014 39.01 +0.32 +0.83%

Soybean Oil Aug 2014 39.14 +0.33 +0.85%

Soybean Oil Sep 2014 39.25 +0.41 +1.06%

Corn Jul 2014 459 +10 +2.23%

Corn Sep 2014 456.25 +12 +2.70%

Corn Dec 2014 457.75 +10.5 +2.35%

Corn Mar 2015 467.25 +10.5 +2.30%

Corn May 2015 473.75 +10 +2.16%

Oats Jul 2014 356.75 +0.5 +0.14%

Oats Sep 2014 340.75 +2.5 +0.74%

Oats Dec 2014 327.75 unch 0.00%

Oats Mar 2015 319.75 +0.25 +0.08%

Oats May 2015 318.25 +0.25 +0.08%

Wheat Jul 2014 618.25 +12.5 +2.06%

Wheat Sep 2014 630.25 +14 +2.27%

Wheat Dec 2014 651 +14 +2.20%

Wheat Mar 2015 669.75 +14.75 +2.25%

Wheat May 2015 680.5 +15.5 +2.33%

Minneapolis

Spring Wheat Jul 2014 709.25 +18.75 +2.72%

Spring Wheat Sep 2014 716 +17.25 +2.47%

Spring Wheat Dec 2014 726.75 +16.5 +2.32%

Spring Wheat Mar 2015 736.25 +17.5 +2.43%

Spring Wheat May 2015 738.5 +16.25 +2.25%

Kansas City

KC HRW Wheat Jul 2014 735.5 +21.5 +3.01%

KC HRW Wheat Sep 2014 740.25 +20.25 +2.81%

KC HRW Wheat Dec 2014 749.75 +18.5 +2.53%

KC HRW Wheat Mar 2015 754.75 +19 +2.58%

KC HRW Wheat May 2015 753.75 +19 +2.59%

Light crude oil nearby futures in New York rose 18 cents at $102.66 US per barrel.

The Canadian dollar at noon was 91.44 cents US, down from 91.46 cents the previous trading day. The U.S. dollar at noon was $1.0936 Cdn.

Today’s U.S. employment report showed 217,000 jobs were created in May, a little less than expected. However, the trade focused on the fact that it was the third straight month of gains over 200,000, indicating gradual improvement.

Statistics Canada said the economy in this country created a net 25,800 jobs in May, all of them were part-time, Reuters reported. Full-time jobs dropped by 29,100, bringing the two-month loss to a round 60,000 positions.

The Canadian unemployment rate edged up to 7.0 percent from 6.9 percent in April as more people sought work.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 38.72 points, or 0.26 percent, at 14,838.90.

On the week, the index climbed 1.6 percent and is up almost nine percent so far this year.

The Dow Jones industrial average today rose 88.17 points or 0.52 percent, to 16,924.28, the S&P 500 gained 8.98 points or 0.46 percent, to 1,949.44 and the Nasdaq Composite added 25.17 points or 0.59 percent, to 4,321.40.

The Dow and the S&P were at record highs.

For the week, the Dow rose 1.2 percent, the S&P 500 rose 1.3 percent and the Nasdaq rose 1.9 percent.