A smaller U.S. and world corn crop estimate from the USDA helped lift corn futures three percent on Friday.
A surprise bearish revision to U.S. soybean production did little damage to soybean prices and canola actually gained slightly pulling off its fourth straight daily increase.
Canola closed at $469.80, up $2.90, climbing 3.4 percent on the week, supported by a weak loonie, slow farmer selling and worries about frost damage.
Canola gained today despite a two percent decline in soybean oil futures, which were weighed down by falling crude oil following a negative outlook for oil from Goldman Sachs.
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USDA’s monthly supply and demand outlook kept the downward pressure on wheat.
Globally it increased its outlook of 2015-16 wheat production to 731.61 million tonnes, up about five million tonnes and ending stocks increased about five million tonnes to 226.56 million.
The changes were mostly the result of a big increase in the European Union crop and also gains in the Black Sea region.
However, most wheat contracts rose a little, riding on the coattails of the rally in corn. Over the week, Chicago wheat climbed about four percent, thanks to corn. That will likely make American wheat even more uncompetitive relative to wheat from the Black Sea region. Russia is talking about reducing its export tax on wheat.
The USDA’s U.S. corn number was close to trader estimates.
USDA pegged U.S. corn at 167.5 bushels per acre and production at 13.585 billion bu. The trade expected 167.6 bu. per acre and a crop of 13.599 billion bu.
While close to expectations, the production decline from the August report was 100 million bushels or about 2.5 million tonnes, nothing to sneeze at.
The bigger surprise was in the soybean number, where the trade had expected trimmed yields due to a hot August.
USDA said U.S. soybean production would be 47.1 bu. per acre and production 3.935 billion bu. The trade expected 46.4 bushels per acre and 3.869 billion bu.
Still, soybean futures were only slightly lower. Perhaps traders simply did not put much faith in the USDA number.
The most bullish number in the report was likely the global corn production.
The USDA said the world would produce 978.1 million tonnes of corn, down 7.5 million tonnes from the August outlook because of reductions in the U.S. and European Union, where late season heat hurt corn but not winter wheat.
Global corn ending stocks dropped to 189.69, down about 5.4 million tonnes from August.
Corn futures had risen all week and jumped more than three percent on Friday following the USDA report. The total gain over the week for the nearby contract was 6.6 percent.
Changes in open interest indicate speculators taking new long or bullish bets on corn prices.
On the domestic front, the Canadian Oilseed Processor’s Association said members crushed 136,076 tonnes of canola in the week ending Sept 9, down almost four percent from the week before.
To date this crop year the crush is 766,218 tonnes, up one percent over last year at the same point.
Only 68 percent of crush capacity was being used, reflecting the poor profit margins in the business this summer. Capacity has increased from last year thanks to the opening of the new Cargill crush plant at Camrose, Alta.
Light crude oil nearby futures in New York were down $1.29 to US$44.63 per barrel.
Goldman Sachs today cut its 2016 forecast for U.S. crude to $45 a barrel from previous forecast of $57 due to oversupply and slowing growth in China.
The investment bank said there was an increasing chance that oil could fall as low as $20 for a short period. U.S. crude production has not fallen even as the number of rigs operating is down by more than half from last year, thanks in part to always improving extraction technology. Meanwhile Saudi Arabia continues to pump out oil, hoping to rub out higher cost competition and regain market share.
The Canadian dollar at noon was US75.32 cents, down from 75.65 cents the previous trading day. The U.S. dollar at noon was C$1.3276.
The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed down 108.50 points, or 0.80 percent, at 13,461.39. Over the week it was off just 0.1 percent.
Dow Jones industrial average today rose 102.69 points, or 0.63 percent, to 16,433.09, the S&P 500 gained 8.75 points, or 0.45 percent, to 1,961.04 and the Nasdaq Composite added 26.09 points, or 0.54 percent, to 4,822.34.
For the week, the Dow was up 2.1 percent, the S&P was up 2.1 percent and the Nasdaq was up 3.0 percent.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2015 469.80 +2.90 +0.62%
Canola Jan 2016 473.10 +2.80 +0.60%
Canola Mar 2016 476.00 +2.50 +0.53%
Canola May 2016 476.70 +2.40 +0.51%
Canola Jul 2016 476.00 +2.20 +0.46%
Milling Wheat Oct 2015 225.00 +1.00 +0.45%
Milling Wheat Dec 2015 225.00 +1.00 +0.45%
Milling Wheat Mar 2016 229.00 +1.00 +0.44%
Durum Wheat Oct 2015 340.00 +5.00 +1.49%
Durum Wheat Dec 2015 340.00 +5.00 +1.49%
Durum Wheat Mar 2016 345.00 +5.00 +1.47%
Barley Oct 2015 184.00 unch 0.00%
Barley Dec 2015 184.00 unch 0.00%
Barley Mar 2016 186.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Sep 2015 887.75 +3.25 +0.37%
Soybeans Nov 2015 874.25 +0.25 +0.03%
Soybeans Jan 2016 877.5 unch 0.00%
Soybeans Mar 2016 879 -0.5 -0.06%
Soybeans May 2016 879.75 -1.5 -0.17%
Soybeans Jul 2016 883 -2.25 -0.25%
Soybean Meal Sep 2015 314.1 +2.7 +0.87%
Soybean Meal Oct 2015 310.9 +2.9 +0.94%
Soybean Meal Dec 2015 309.3 +2.6 +0.85%
Soybean Oil Sep 2015 26.58 -0.29 -1.08%
Soybean Oil Oct 2015 26.65 -0.3 -1.11%
Soybean Oil Dec 2015 26.85 -0.32 -1.18%
Corn Sep 2015 374.5 +12.75 +3.52%
Corn Dec 2015 387 +12.75 +3.41%
Corn Mar 2016 398.25 +12.75 +3.31%
Corn May 2016 405.25 +12.75 +3.25%
Corn Jul 2016 410 +12.5 +3.14%
Oats Sep 2015 236 -2 -0.84%
Oats Dec 2015 230 -2 -0.86%
Oats Mar 2016 231 -2.25 -0.96%
Oats May 2016 232.75 -3.25 -1.38%
Oats Jul 2016 233.75 -3.25 -1.37%
Wheat Sep 2015 475.5 +7.5 +1.60%
Wheat Dec 2015 485 +7 +1.46%
Wheat Mar 2016 493.5 +7.5 +1.54%
Wheat May 2016 499 +8 +1.63%
Wheat Jul 2016 503.25 +7.75 +1.56%
Minneapolis
Spring Wheat Sep 2015 487.75 -3.5 -0.71%
Spring Wheat Dec 2015 511.5 +2.75 +0.54%
Spring Wheat Mar 2016 526 +3 +0.57%
Spring Wheat May 2016 536.5 +3.5 +0.66%
Spring Wheat Jul 2016 546.5 +3.5 +0.64%
Kansas City
Hard Red Wheat Sep 2015 459 +5.5 +1.21%
Hard Red Wheat Dec 2015 482.25 +4.75 +0.99%
Hard Red Wheat Mar 2016 496 +5 +1.02%
Hard Red Wheat May 2016 506 +5.25 +1.05%
Hard Red Wheat Jul 2016 515.5 +5 +0.98%
