Harvest pressure pushes crop futures lower

By D’Arce McMillan

Saskatoon newsroom

Canola and other crop futures fell on Thursday largely on harvest pressure.

American farmers are harvesting record yields and do not have the storage space to keep it all on farm so there will likely be heavy deliveries during harvest.

There is also some off-the-combine delivery in Western Canada, generating commercial hedges.

Another factor in the market is the strength of the U.S. dollar against many world currencies. As the buck rises, it makes its grain more expensive for global grain buyers. The U.S. greenback hit a six-year high versus Japan’s yen today.

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The dollar index, a gauge of its value against six currencies, climbed to its highest level in four years. Traders expect the U.S. will continue a gradual monetary tightening policy while the European Union another major players are loosening their monetary policy to try to kick start their moribund economies.

French consultancy Strategie Grains today raised its forecast for the 2014 EU grain corn crop to a record 71.3 million tonnes, up 3.3 million tonnes from last month and up 11 percent over 2013.

Agriculture Canada today released a supply and disposition report for Canadian grains that was positive for the outlook for the 2015-16 marketing year.

The report incorporates Statistics Canada’s production and year-end stocks numbers. As you might remember, the stocks report showed July 31 supplies were lower than expected although still quite ample.

Agriculture Canada takes these numbers and adds its own forecasts for domestic and export demand and establishes a forecast for year-end stocks for July 31, 2015.

It is very early in the crop year and we don’t know what will wind up in the bin and how buyers will react. But Agriculture Canada has penciled in stocks forecasts that are very manageable, even somewhat tight in some cases.

For example, it sees durum stocks falling to one million tonnes, down from 1.813 million at the end of 2013-14. That would be lowest durum stocks since 2008.

The tightening year-end Canadian stocks forecast is positive, but remember, the forecast for U.S. crop ending stocks sees supplies increasing.

ICE Futures Canada, dollars per tonne

Canola Nov 2014 406.40 -5.20 -1.26%

Canola Jan 2015 412.80 -3.70 -0.89%

Canola Mar 2015 418.90 -3.20 -0.76%

Canola May 2015 424.10 -2.20 -0.52%

Canola Jul 2015 428.30 -1.70 -0.40%

Milling Wheat Oct 2014 191.00 +1.00 +0.53%

Milling Wheat Dec 2014 198.00 +1.00 +0.51%

Milling Wheat Mar 2015 207.00 +1.00 +0.49%

Durum Wheat Oct 2014 303.20 +14.40 +4.99%

Durum Wheat Dec 2014 309.70 +14.90 +5.05%

Durum Wheat Mar 2015 310.70 +14.90 +5.04%

Barley Oct 2014 123.50 unch 0.00%

Barley Dec 2014 125.50 unch 0.00%

Barley Mar 2015 126.50 unch 0.00%

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

Chicago

Soybeans Nov 2014 971.5 -11 -1.12%

Soybeans Jan 2015 979.5 -11.25 -1.14%

Soybeans Mar 2015 987 -11.75 -1.18%

Soybeans May 2015 994.25 -12 -1.19%

Soybeans Jul 2015 1000.5 -12 -1.19%

Soybeans Aug 2015 1002.75 -12 -1.18%

Soybean Meal Oct 2014 328.8 -7.6 -2.26%

Soybean Meal Dec 2014 320.3 -3.9 -1.20%

Soybean Meal Jan 2015 317.7 -3.4 -1.06%

Soybean Oil Oct 2014 32.72 -0.67 -2.01%

Soybean Oil Dec 2014 32.87 -0.68 -2.03%

Soybean Oil Jan 2015 33.12 -0.68 -2.01%

Corn Dec 2014 338.25 -3.5 -1.02%

Corn Mar 2015 350.75 -3.25 -0.92%

Corn May 2015 359.25 -3.25 -0.90%

Corn Jul 2015 366.25 -3.5 -0.95%

Corn Sep 2015 374 -3.25 -0.86%

Oats Dec 2014 342.25 -4.25 -1.23%

Oats Mar 2015 328 -2.5 -0.76%

Oats May 2015 321.25 -1.5 -0.46%

Oats Jul 2015 315.75 -0.75 -0.24%

Oats Sep 2015 321.25 -0.5 -0.16%

Wheat Dec 2014 488.5 -10.75 -2.15%

Wheat Mar 2015 505.75 -10.5 -2.03%

Wheat May 2015 517.25 -10 -1.90%

Wheat Jul 2015 526 -10.25 -1.91%

Wheat Sep 2015 538.25 -10.25 -1.87%

Minneapolis

Spring Wheat Dec 2014 550.25 -12.75 -2.26%

Spring Wheat Mar 2015 567 -12 -2.07%

Spring Wheat May 2015 579 -11.5 -1.95%

Spring Wheat Jul 2015 590.25 -10.5 -1.75%

Spring Wheat Sep 2015 600.25 -10.25 -1.68%

Kansas City

Hard Red Wheat Dec 2014 569.75 -12.5 -2.15%

Hard Red Wheat Mar 2015 577.25 -12.5 -2.12%

Hard Red Wheat May 2015 580.75 -12.75 -2.15%

Hard Red Wheat Jul 2015 573.25 -10.75 -1.84%

Hard Red Wheat Sep 2015 584.25 -10.75 -1.81%

Light crude oil nearby futures in New York fell $1.35 at $93.07 US per barrel.

The Bank of Canada noon rate for the loonie was 91.36 cents US, up from 91.31 cents the previous trading day. The U.S. dollar at noon was $1.0946 Cdn.

In unofficial tallies —

The Toronto Stock Exchange’s S&P/TSX composite index closed up 6.66 points, or 0.04 percent, at 15,465.54.

The Dow Jones industrial average rose 109.21 points, or 0.64 percent, to 17,266.06, the S&P 500 gained 9.8 points, or 0.49 percent, to 2,011.37 and the Nasdaq Composite added 31.24 points, or 0.68 percent, to 4,593.43.