Favourable weather, technical weakness pressure canola down

The weather risk premium continued to come out of the crop market, pressuring canola and other crops lower Thursday.

Technical support in canola was breached, adding to the downward pressure.

Weather forecasts today held with the outlook that occasional showers and lack of heat will maintain favourable growing conditions in the U.S. Midwest, supporting the expectation of a record crop. Of course, if the forecasted rain does not come or is less than expected, then a risk premium will have to be added again.

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Prairie Wheat Weekly: Prices up in most areas

Cash prices for spring wheat and durum across the Canadian Prairies were mostly higher during the week ended Nov. 4. As Minneapolis spring wheat stepped back, there was a modest increase in Kansas City hard red while Chicago soft red was up sharply.

Canola was also pressured by a rising loonie, falling soy oil prices and generally favourable growing weather across the Prairies.

The November canola contract broke below $523, a level that it had bounced off for the past three days, and then dropped below $520, a resistance level set back last fall. This added further technical downward pressure.

November closed at $519.

The Saskatchewan Agriculture crop report today put the percentage of crop in good-excellent condition as follows: spring wheat 86 percent; durum 88 percent; oats 86 percent; barley 81 percent; canola 80 percent.

French analyst Strategie Grains on Thursday lifted its forecast for this year’s soft wheat harvest in the European Union for the second month in a row on favourable growing conditions in much of the bloc, Reuters reported.

Soft wheat output in the 28-member EU, including Croatia, which joined the bloc on July 1, is now expected to be 133.4 million tonnes, up 1.9 million tonnes from last month’s estimate and now up six percent on the 2012-13 crop, Reuters said.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2013    519.90    -7.50    -1.42%
Canola Jan 2014    525.40    -7.90    -1.48%
Canola Mar 2014    529.90    -7.20    -1.34%
Canola May 2014    530.70    -5.60    -1.04%
Canola Jul 2014    531.00    -4.50    -0.84%

Milling Wheat Oct 2013    267.00    unch    0.00%
Milling Wheat Dec 2013    271.00    unch    0.00%
Milling Wheat Mar 2014    278.00    unch    0.00%

Durum Wheat Oct 2013    302.00    unch    0.00%
Durum Wheat Dec 2013    307.00    unch    0.00%
Durum Wheat Mar 2014    312.00    unch    0.00%

Barley Oct 2013    194.00    unch    0.00%
Barley Dec 2013    199.00    unch    0.00%
Barley Mar 2014    199.00    unch    0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago
Soybeans Aug 2013    1469.25    -8.25    -0.56%
Soybeans Sep 2013    1316.25    -13    -0.98%
Soybeans Nov 2013    1265.75    -17.75    -1.38%
Soybeans Jan 2014    1271    -17.5    -1.36%
Soybeans Mar 2014    1268.75    -16.5    -1.28%
Soybeans May 2014    1263.75    -15    -1.17%

Soybean Meal Aug 2013    470.4    +1.3    +0.28%
Soybean Meal Sep 2013    417.1    -6.4    -1.51%
Soybean Meal Oct 2013    382.2    -7.2    -1.85%

Soybean Oil Aug 2013    45.52    -0.27    -0.59%
Soybean Oil Sep 2013    45.57    -0.2    -0.44%
Soybean Oil Oct 2013    45.44    -0.14    -0.31%

Corn Sep 2013    541    +2.5    +0.46%
Corn Dec 2013    500.75    -1.25    -0.25%
Corn Mar 2014    513    -1.25    -0.24%
Corn May 2014    520.75    -1    -0.19%
Corn Jul 2014    527    -1    -0.19%

Oats Sep 2013    353.25    unch    0.00%
Oats Dec 2013    340.75    unch    0.00%
Oats Mar 2014    347.25    +1.25    +0.36%
Oats May 2014    347.5    +1.25    +0.36%
Oats Jul 2014    357    +1.25    +0.35%

Wheat Sep 2013    660.5    -4.5    -0.68%
Wheat Dec 2013    673    -4.75    -0.70%
Wheat Mar 2014    684.25    -6.25    -0.91%
Wheat May 2014    691.5    -6.5    -0.93%
Wheat Jul 2014    688.75    -6.5    -0.93%

Minneapolis
Spring Wheat Sep 2013    750.25    -5    -0.66%
Spring Wheat Dec 2013    762    -5.25    -0.68%
Spring Wheat Mar 2014    775    -5.25    -0.67%
Spring Wheat May 2014    783.75    -4.25    -0.54%
Spring Wheat Jul 2014    788    -4.25    -0.54%

Kansas City

KCBT Red Wheat Sep 2013    702.25    -0.5    -0.07%
KCBT Red Wheat Dec 2013    716    -3    -0.42%
KCBT Red Wheat Mar 2014    726.25    -5    -0.68%
KCBT Red Wheat May 2014    731.25    -6    -0.81%
KCBT Red Wheat Jul 2014    726.75    -5.75    -0.78%

Oil rose on data that showed that the number of people who filed for unemployment assistance in the U.S. fell to a two-month low last week.

Light crude oil nearby futures in New York rose $1.56 at $108.04 US per barrel.

The Canadian dollar at noon was 96.19 cents US, up from 95.92 cents the previous trading day. The U.S. dollar at noon was $1.0396 Cdn.

U.S. stock markets were supported by stronger than expected quarterly profits at Morgan Stanley and by lingering support from comments of Federal Reserve chairman Ben Bernanke who said Wednesday that the bank would let employment and economic data guide its stimulus pullback.

In early unofficial tallies —

The Toronto Stock Exchange’s S&P/TSX composite index rose 60.08 points, or 0.48 percent, to close at 12,628.85.

The Dow Jones industrial average rose 78.17 points, or 0.51 percent, to end at 15,548.69.

The Standard & Poor’s 500 Index gained 8.46 points, or 0.50 percent, to finish at 1,689.37.

The Nasdaq Composite Index added just 1.28 points, or 0.04 percent, to close at 3,611.28.