Canola rose for a third day Tuesday on rising soybean and corn prices as traders fretted about the declining condition of those to major crops in the United States.
November canola closed at $559.30 per tonne, up $1.80.
The U.S. Department of Agriculture’s weekly crop condition rating late on Monday lowered the rating for corn and soybeans more than expected.
• Weather forecaster Commodity Weather Group today dropped its estimate for U.S. 2011 corn production to 12.485 billion bushels from its previous outlook for 12.621 billion. The U.S. government’s current outlook is for 12.914 billion bu.
Commodity Weather Group put the average yield at 148.7 bu. per acre, similar to the 149 bu. forecast last week by Elwynn Taylor, a meteorologist with Iowa State University Extension.
• Support also came from an upbeat day on equity markets as traders took heart from better-than-expected German and Chinese factory activity data.
• Speculation that U.S. Federal Reserve chairperson Ben Bernanke might announce another round of stimulous in a speech on Friday also supported commodity and equity markets.
• Canola traders squared positions ahead of Wednesday morning’s Statistics Canada crop production report.
A Reuters poll of traders and analysts last week indicated the potential for a large canola crop. The range of forecasts for canola was 12.9 to 14.8 million tonnes with an average of 13.6 million. Agriculture’s Canada’s forecast posted earlier this month is 13.4 million. Last year, the crop was 11.87 million tonnes.
• A new Pool Return Outlook will come out on Thursday and the Canadian Wheat Board will have its end of the crop year news conference on Friday.
Winnipeg (per tonne)
Canola Nov 11 $559.30, up $1.80
Canola Jan 12 $567.70, up $1.90
Canola Mar 12 $575.80, up $2.00
Canola May 12 $582.30, up $1.80
The previous day’s best basis was $10.00 under the November contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 51. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Oct 11 $201.00, up $2.00.
There were 25 trades in the October barley contract and 20 trades in the December.
Chicago (per bushel)
Soybeans Sep 11 $13.895, up 13.0 cents
Soybeans Nov 11 $13.9725, up 12.0
Soybeans Jan 12 $14.065, up 11.25
Corn Sep 11 $7.3025, up 9.75
Corn Dec 11 $7.435, up 9.0
Oats Sep 11 $3.645, up 10.5
Oats Dec 11 $3.73, up 10.0
Minneapolis (per bushel)
Spring Wheat Sep 11 $9.5025, up 7.0 cents
Spring Wheat Dec 11 $9.345, up 11.25
Spring Wheat Mar 12 $9.345, up 11.0
Light crude oil nearby futures in New York closed up $1.02 at $85.44 US per barrel.
The Canadian dollar at noon was $1.0125 US, up from $1.0100 the previous trading day. The U.S. dollar at noon was 98.77 cents Cdn.
The Toronto Stock Exchange composite index in a preliminary tally closed up 269.97 points or 2.24 percent, at 12,338.33.
The Standard & Poor’s 500 Index unofficially was up 38.41 points, or 3.42 percent, at 1,162.23.
