Canola and other crop futures fell Wednesday when the United States Department of Agriculture’s production and stocks reports showed a larger grain supply than expected.
The report’s negative effect was heightened by a generally negative tone to commodities.
Crude oil and gasoline futures fell sharply lower after a report on U.S. gasoline stocks came in higher than expected.
Also, several countries issued monthly inflation reports that heightened expectations that government will raise interest rates and do other things to cool their economies and control rising prices. That could reduce demand for commodities.
Crop price losses were limited by continuing weather worries in Canada, the U.S., Europe and elsewhere.
The USDA report showed more grain around than traders expected, but generally it still painted a tight supply-demand scenario.
USDA expects corn ending stocks this year to be 730 million bushels, above analysts’ expectations for 661 million.
It expects corn stocks at the end of the 2011-12 crop year to be 900 million bu., larger than the trade estimate of 808 million bu.
USDA shaved its estimated corn yield for the new crop to 158.7 bu. an acre, three bushels less than normal, “reflecting the slow pace of planting progress through early May.”
It kept its seeded acreage number steady, but in the end, with late seeding and flooding, final acreage might have to be reduced.
USDA put the hard red winter wheat crop at 1.02 billion bushels. It would still be the smallest in five years, but it was up from the average of analysts’ estimates of 771 million bu.
USDA put all wheat production at 2.208 billion bu. The trade expected 2.037 billion bu.
It pegged U.S. wheat stockpiles of 702 million bu. at the end of the 2011-12, seven percent higher than average trade estimates of 658 million, but down 16 percent from 2010-11.
Global wheat ending stocks were forecast at 181.26 million tonnes for 2011-12, down slightly from the current marketing year total of 182.2 million tonnes, and only slightly below what traders expected.
Soybean carryover for the current year was estimated at 170 million bushels.
USDA pegged 2011-12 ending stocks at 160 million bu., slightly lower than the average estimate of 167 million bu.
Winnipeg (per tonne)
Canola May 11 $556.30, down $8.40
Canola Jul 11 $565.30, down $8.40
Canola Nov 11 $560.30, down $6.90
Canola Jan 12 $567.50, down $6.80
The previous day’s best basis was $18 under the July contract according to ICE Futures Canada in Winnipeg.
The May contract’s 14-day Relative Strength Index was 49. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley May 11 $200 unchanged
Chicago (per bushel)
Soybeans May 11 $13.335, down 6.5 cents
Soybeans Jul 11 $13.3175, down 6.25
Soybeans Nov 11 $13.21, down 1.5
Corn May 11 $6.6875, down 37.25
Corn Dec 11 $6.26, down 26.75
Oats May 11 $3.47 up 2.0
Oats Dec 11 $3.57, down 10.0
Minneapolis (per bushel)
Spring Wheat May 11 $9.37, down 34.0 cents
Spring Wheat Jul 11 $9.255, down 33.75
Spring Wheat Dec 11 $9.4025, down 31.25
Light crude oil nearby futures in New York fell 5.67 to $98.21 US per barrel.
The Canadian dollar at noon was $1.0436 US, up from $1.0406 the previous trading day. The U.S. dollar at noon was 95.82 cents Cdn.
The Toronto Stock Exchange composite index closed down 222.32 points, or 1.63 percent, at 13,419.74, weakened by the lower crude oil and commodity prices.
The Standard and Poor’s 500 index fell 15.10 points, or 1.11 percent, to 1,342.06.
