Canola edged higher but corn posted strong gains Thursday after USDA cut its forecast of corn seeded acres and ending stocks for 2011-12.
Canola got no help from soybeans, which fell on USDA’s increased forecast for U.S. soybean ending stocks for old and new crops.
Also, estimates of the Brazilian and Argentine soybean crops keep edging higher.
Corn was also supported by rising crude oil, buoyed by lingering support from OPEC’s decision Wednesday not to increase production.
USDA lowered its corn seeded acreage forecast to 90.7 million acres, down from 92.2 million in May.
Although it kept its 2010-11 U.S. ending corn stocks steady at 730 million bushels it lowered its 2011-12 forecast to a very tight 695 million bu., below an average of analysts’ estimates for 771 million and below the outlook in May for 900 million.
Total corn production was forecast at 13.2 billion bu. down 305 million from last month’s forecast but still record production.
USDA slightly increased its forecast for U.S. wheat production because of better than expected winter wheat crop but it slightly reduced its 2010-11 and 2011-12 year end stocks forecasts.
It slightly reduced its outlook for wheat seeded area due to seeding problems in spring wheat and durum in North Dakota.
It cut its outlook for European wheat production to 131.5 million tonnes from 138.62 and cut Canadian production to 25 million tonnes from 26 million last month.
Those cuts were partly offset by increases to the wheat estimates in Argentina, Australia, Pakistan and the U.S. However, it also lowered its world demand forecast and increased its beginning stocks number to reflect larger than expected stocks in Russia.
The net result was that it increased its forecast for global year end wheat stocks to 184.26 million tonnes from 181.26 million last month.
Saskatchewan Agriculture today said 79 percent of crops are in the ground, compared to the five-year average of 90 percent. However, progress ahead of last year when only 70 percent was seeded.
The southeast reports 40 percent of the crop seeded, the southwest 77 percent, east-central 83 per cent, west central 98 percent, the northeast 97 percent and the northwest 95 percent.
Winnipeg (per tonne)
Canola Jul 11 $592.80, up 40 cents
Canola Nov 11 $595.80, up 40 cents
Canola Jan 12 $603.40, up 30 cents
Canola Mar 12 $610.30, up 30 cents
The previous day’s best basis was $14.60 under the July contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 58. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Jul 11 205, unchanged
Chicago (per bu.)
Soybeans Jul 11 $13.9375, down 7.75 cents
Soybeans Aug 11 $13.8725, down 7.0
Soybeans Nov 11 $13.8675, down 5.75
Corn Jul 11 $7.855, up 21.5
Corn Dec 11 $7.14, up 20.25
Oats Jul 11 $3.95, up 12.0
Oats Dec 11 $4.06, up 11.5
Minneapolis (per bu.)
Spring Wheat Jul 11 $10.2075, down 0.75 cents
Spring Wheat Sep 11 $9.645, down 10.75
Spring Wheat Dec 11 $9.6075, down 13.5
Oil rose on lingering support from OPEC’s decision Wednesday not to increase production.
Light crude oil nearby futures in New York rose $1.19 to $101.93 US per barrel.
The Canadian dollar at noon was $1.0275 US, down from $1.0225 the previous trading day. The U.S. dollar at noon was 97.32 cents Cdn.
Equity markets broke there multi-day decline, rising on news that the U.S. trade deficit fell unexpectedly in April as exports hit a new high and imports from Japan tumbled more than 25 percent after its earthquake, tsunami and nuclear disaster.
The Toronto Stock Exchange composite index closed up 71.95 points, or 0.55 percent, at 13,255.74.
The Standard and Poor’s 500 index added 12.64 points, or 0.99 percent, to 1,292.20.
