Canola futures continued their rally on Wednesday, supported by demand from crushers and exporters.
Over the past eight days January canola has risen 6.5 percent.
Stronger soybean futures also supported canola.
Soybeans were lifted by rallying corn and by expectations that the U.S. Department of Agriculture will lower its year end soybean stocks number in its report to be released Friday morning.
From the start of the U.S. crop year Sept. 1 to Dec. 2, the U.S. has exported 623.8 million bushels of soybeans, up 13 percent from a year earlier.
Showers in South American soybean areas limited gains. However, the moisture was not expected to reach southern growing areas in Argentina.
Corn rose on expectations the USDA will lower its already tight year end corn stocks number.
Also, politicians said that they were working on including extending ethanol subsidies in a large tax bill that includes extending the Bush tax cuts. The ethanol subsidies are to expire at the end of the year.
Minneapolis wheat rose again, largely due to excess rain in Australia. The Australian Bureau of Agricultural and Resource Economics yesterday forecast a record wheat crop of 26.8 million tonnes. But that did not include the effect of the torrential rains of recent days.
Tom Puddy, head of marketing at Australian grain exporter CBH told Bloomberg news that two to three million tonnes of production might be abandoned because of the rain. CBH forecasts a 23 million tonne crop of which as much as 11 million tonnes would be feed.
Also supporting wheat were comments from Michael Shean, an analyst with the USDA’s foreign service. He told Dow Jones news that dryness in Iran, Iraq and Syria could lead to poor crops and increased demand for imported wheat.
Iran is not normally a large importer, but drought in 2008 caused it to import 6.8 million tonnes of wheat and in 2009 it imported five million tonnes.
In Winnipeg, the January canola contract rose $5.50 to $563.70 per tonne on 11,120 trades.
The March contract rose $5.10 to $571.60 on 10,355 trades.
The November 2011 contract rose $1.80 to $517.40.
The previous day’s best basis widened to $24 under the nearby contract.
The January contract 14-day Relative Strength Index was 66. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
December barley futures were steady at $188 per tonne. March was steady at $194.
Chicago January soybeans rose 10.5 cents to $12.96 US per bushel.
December corn rose 12.25 cents to $5.595 per bu. March rose 12.75 cents to $5.745
December oats rose 14 cents to $3.78 per bu. March rose five cent to $3.78
December Minneapolis hard spring wheat rose 7.75 cents to $8.4275 per bu. March rose 7.75 cents to $8.6275.
In New York, crude oil for January delivery fell 17 cents to $88.52 US per barrel.
The Canadian dollar at noon was 99.02 cents US, down from 99.08 cents the previous trading day. The U.S. dollar at noon was $1.0099.
The TSX composite index fell 98.67 points to close at 13,152.00. The Standard & Poor’s 500 rose 4.49 points to 1,228.24.
