Deliveries weaken canola Thursday but corn soars on drought

Worry about demand destruction waned Thursday and U.S. crop markets took off again.

However, canola fell on generally good growing weather as temperatures in Western Canada are forecast to moderate in coming days. Thundershowers are expected the next several days in wide areas of the Prairies.

Pressure also came from a pick up in farmer deliveries. Also pressuring canola were lower soybean oil futures.

The November canola contract closed at $621.50, down $5.60.

Sorry, made an error yesterday. The final day of trade for the July contract is Friday. There was no trade and there is no open interest in the contract. It is simply following the November price change. July closed at $681.50.

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New crop corn futures rose four percent. Market focus has returned to yield damage caused by the drought. Some believe yields will fall below the 146 bushel an acre forecast by USDA on Wednesday.

Investment bank Goldman Sachs today cut its U.S. corn yield forecast to 143.5 bu. per acre.

Spring wheat futures rose more than two percent, supported by corn and by production problems in the Black Sea region.

November soybeans climbed less than one percent, as there is time yet for rain to rescue yield as the crop develops later than corn.

• Saskatchewan Agriculture said that as of July 9, 70 percent of canola is in good to excellent condition, along with 81 percent of spring wheat, 82 percent of durum, 77 percent of oats and 77 percent of barley. Last year at this time, only 47 percent of canola was good to excellent.
Crop development in some areas is behind normal. Overall, oilseed development is 58 percent is normal or advanced and 42 percent is behind normal.

• Russia’s Grain Producer’s Union today said grain production would likely fall to less than 80 million tonnes this year. Analysts SovEcon last week cut its outlook to 80 million tonnes from its previous forecast of 80-85 million.

• India’s monsoon revived in the last week with rainfall one percent above average, a welcome development after falling 49 percent below average the previous week. The late rain caused farmers in some states to delay planting of the summer crop but they are now catching up.

Winnipeg (per tonne)
Canola Jul 12 $681.50, down $5.60   -0.82%
Canola Nov 12 $621.50, down $5.60   -0.89%
Canola Jan 13 $624.50, down $5.50   -0.87%

Canola Mar 13 $622.60, down $6.00 -0.95%

The best cash price in the par region on July 11 was $652.10, said ICE Futures Canada. The November futures July 11 was $627.10 implying a basis $25 over the November contract.

The 14-day relative strength index for November was 75 today.

Western Barley Jul 12 $267.00, up $10.00 +3.89%
Western Barley Oct 12 $251.00, unchanged
There was no trade and there is no open interest in Western Barley contracts. Activity has switched to the new Barley contract.

Milling Wheat Oct 12 $302.50, up 2.00   +0.67%
Milling Wheat Dec 12 $310.00, up 2.00   +0.65%
Milling Wheat Mar 13 $320.00, up 2.00   +0.63%

Durum Wheat Oct 12 $320.50, up $10.00   +3.22%
Durum Wheat Dec 12 $325.00, up $10.00   +3.17%
Durum Wheat Mar 13 $331.60, up $10.00   +3.11%

Barley Oct 12 $259.50, unchanged
Barley Dec 12 $262.20, unchanged
Barley Mar 13 $265.20, unchanged

Chicago (per bushel)
Soybeans (P) Jul 12 $16.2575, up 2.75 cents   +0.17%
Soybeans (P) Aug 12 $15.725, up 1.0   +0.06%
Soybeans (P) Sep 12 $15.455, up 4.75   +0.31%
Soybeans (P) Nov 12 $15.29, up 6.5   +0.43%

Corn (P) Jul 12 $7.7125, up 20.5 +2.73%
Corn (P) Sep 12 $7.3125, up 27.25 +3.87%
Corn (P) Dec 12 $7.3225, up 28.25 +4.01%

Oats (P) Jul 12 $3.6775, up 6.25 +1.73%
Oats (P) Sep 12 $3.705, up 6.25 +1.72%

Oats (P) Dec 12 $3.72, up 5.75 +1.57%

Minneapolis (per bushel)
Spring Wheat Jul 12 $9.3275, up 18.75   +2.05%
Spring Wheat Sep 12 $9.42, up 22.0   +2.39%
Spring Wheat Dec 12 $9.37, up 21.25   +2.32%
Spring Wheat Mar 13 $9.4075, up 20.5   +2.23%

Nearby crude oil in New York was up 27 cents at $86.08.

The Bank of Canada noon rate for the Canadian dollar was 97.90 cents US, down from 98.09 the day before.
The U.S. dollar was $1.0214 Cdn.

Fears about global economic weakness and the debt crisis in Europe pressured stock markets generally lower. There was some solace from data that showed the number of Americans applying for jobless benefits fell last week to a four-year low.

On Friday China releases second-quarter gross domestic product results. Investors are worried about slowing growth in the Asian giant.

The Toronto Stock Exchange’s S&P/TSX composite index finished down 119.17 points, or one percent, at 11,425.47.

The Dow Jones industrial average was down 5.56 points, or 0.04 percent, at 12,598.97.

The Standard & Poor’s 500 Index fell 4.32 points, or 0.32 percent, at 1,337.13.

The Nasdaq Composite Index fell 18.84 points, or 0.65 percent, to close at 2,869.14.

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