Friday’s U.S. Department of Agriculture quarterly stocks and final 2012 supply and demand reports moved grains futures markets higher and soybean prices lower, but it was not the explosive limit-locking reaction the crop markers have come to expect in recent years from the january report.
March canola closed at $583.10 per tonne, up 30 cents.
For the week, March gained $4.70.
March corn closed at $7.0875 per bushel, up 10 cents.
March soybeans closed at $13.7325, down 6.5 cents.
March Minneapolis spring wheat closed at $8.4525 per bu., up six cents.
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U.S. soybean futures fell to a 1-1/2 week low on Tuesday as China continued to shun purchases from the United States and as forecasts for improved rains in the coming days reinforced expectations for a sizeable Midwest harvest.
March oats closed at $3.4675 per bu., up 7.25 cents.
There were plenty of small surprises in the report on yield, acreage and disappearance, but in the end, ending stocks were only moderately adjusted, leading to the relatively restrained response.
“When you drill it all down to the ending stocks, honestly not much has changed,” said Ken Ball of PI Financial.
Errol Anderson of Pro Market Communications agreed.
“I thought it was neutral to slightly supportive,” said Anderson.
The January report has rocked the market in recent years, often making limit moves seconds or minutes after its release. While U.S. crops are no longer in the field, alterations to December acreage and yield estimates can affect the supply side of the equation, while export, domestic consumption and foreign stocks estimates can change the demand side.
This report altered many numbers. It increased the size of the drought-ravaged corn crop and reduced the ending stocks number. That ending stocks revision is what caused the modest corn futures rally. Corn stocks by the end of the crop year are expected to be down to a three-week supply, the smallest since 1996.
The biggest bullish impact was felt in wheat markets, which reacted to a much larger reduction in ending stocks projections. However, world and North American wheat stocks are still ample and much of the rally was attributed to short-covering and a correction to big recent sell-offs.
“With the markets so technically oversold, coming down so hard in front of a report, I think we’re due for a bounce,” said Anderson.
“The worst of the selling, at least for the time being, is over. That’s the message traders are taking from this.”
Ball agreed: “It’s not a surprise that wheat’s up because wheat has slumped $1.50 in the last six weeks,” said Ball.
Wheat also benefited from a surprisingly low estimate of winter wheat seeded acreage, particularly hard red winter wheat, which is suffering from drought. Hard red winter wheat acreage of 29.1 million came in more than one million acres below market expectations.
The slight increase in soybean ending stocks projections knocked soybeans moderately, but canola futues were hardly affected.
Anderson said the more bullish stocks numbers for wheat and corn and only slightly negative numbers for soybeans should put a bottom under the market for the time being until there is significant new supply or demand news.
Futures at the close were as follows.
Winnipeg (per tonne)
Canola Jan 13 $604.40, up $0.30 +0.05%
Canola Mar 13 $583.10, up $0.30 +0.05%
Canola May 13 $574.50, down $0.60 -0.10%
Canola Jul 13 $570.20, down $0.90 -0.16%
Milling Wheat Mar 13 $290.50, unchanged
Milling Wheat May 13 $293.50, unchanged
Milling Wheat Jul 13 $295.50, unchanged
Durum Wheat Mar 13 $312.40, unchanged
Durum Wheat May 13 $316.40, unchanged
Durum Wheat Jul 13 $319.40, unchanged
Barley Mar 13 $242.90, unchanged
Barley May 13 $243.90, unchanged
Barley Jul 13 $244.40, unchanged
Chicago (per bushel)
Soybeans (P) Jan 13 $14.2475, up 7.25 +0.51%
Soybeans (P) Mar 13 $13.7325, down 6.5 -0.47%
Soybeans (P) May 13 $13.64, down 7.5 -0.55%
Soybeans (P) Jul 13 $13.575, down 9.75 -0.71%
Corn (P) Mar 13 $7.0875, up 10.0 +1.43%
Corn (P) May 13 $7.07, up 9.5 +1.36%
Corn (P) Jul 13 $6.9875, up 8.25 +1.19%
Oats (P) Mar 13 $3.4675, up 7.25 +2.14%
Oats (P) May 13 $3.5225, up 7.25 +2.10%
Oats (P) Jul 13 $3.575, up 7.0 +2.00%
Minneapolis (per bushel)
Spring Wheat Mar 13 $8.4525, up 6.0 +0.71%
Spring Wheat May 13 $8.5525, up 5.0 +0.59%
Spring Wheat Jul 13 $8.6625, up 6.0 +0.70%
Spring Wheat Sep 13 $8.675 up 6.75 +0.78%
The Bank of Canada noon rate for the loonie was $1.0162 US, up from $1.0142 the day before.
The U.S. dollar was 98.41 cents Cdn.
Nearby crude oil futures in New York fell 26 cents to close at $93.56 per barrel.
The Toronto Stock Exchange’s S&P/TSX composite index edged up 2.44 points, or 0.02 percent, to 12,602.18, the highest close in more than 10 months.
The Dow Jones industrial average rose 17.21 points, or 0.13 percent, to 13,488.43.
The Standard & Poor’s 500 Index slipped 0.07 points to 1,472.05.
The Nasdaq Composite Index edged up 3.88 points, or 0.12 percent, to 3,125.64.
For the week, the TSX composite rose 0.5 percent, the S&P and Dow both gained 0.4 percent and the Nasdaq rose 0.8 percent.
