Crop problems spark canola price surge

The urgent situation of delayed seeding, flooded fields and delayed maturity finally registered on the Winnipeg canola market today, with the July contract posting the largest one-day gain in six months.July canola rose $6.30 per tonne to $378.80 on 9,020 trades.The Canadian Wheat Board today said that up to one million acres of oilseeds and cereals, a lot of it in soggy northeastern Saskatchewan, might not be seeded. More rain was forecast for the weekend.Saskatchewan Agriculture said only 59 percent of the overall crop in the province had been seeded as of June 1, compared to the five-year average of 86 percent. Less than 45 percent had been seeded in the northeast and east-central parts of the province.Support also came from a weaker Canadian dollar and a big rise in Chicago soybeans based on strong cash markets and a report by the U.S. weather service that said a developing La Nina in the Pacific Ocean could produce hot, dry weather in the U.S. Midwest this summer.With Prairie farmers preoccupied trying to seed and muddy yards and roads making grain deliveries difficult, some companies have moved their basis to attractive levels.The previous day’s best basis on the July contract was -$2.78 per tonne off the July contract in the par region, according to the Winnipeg ICE Futures daily report.The 14-day Relative Strength Index for July canola was 51, according to BarChart.com. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates over bought.New crop November canola rose $5.90 to $383.80 per tonne on 3,510 trades.November 2011 rose $3.40 to $402.40 on three trades.The Canadian dollar at noon was 96.01 cents US, down from 96.12 cents at noon the previous trading day. The U.S. dollar at noon was $1.0416.Winnipeg barley July was untraded at $147.50. December was untraded at $150, with 10 outstanding contracts.Chicago July soybeans rose 22.5 cents to $9.55 US per bushel; new-crop November rose 16.25 cents to $9.1975.Also supporting soybeans and commodities generally was a belief that U.S. employment and economic performance is improving, offsetting Europe’s fiscal crisis.July oats rose four cents to $1.96 per bu. December oats rose 3.5 cents to $2.145 per bu. In New York, crude oil for July delivery rose $1.75 to $74.61 per barrel.

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