With U.S. corn and soybeans in worse shape than expected after last week’s heatwave, crop futures prices, including canola, rose on Tuesday.
U.S. crop futures were also supported by the U.S. buck weakening against most currencies. The deadlock in the U.S. deficit and debt ceiling issue weighed on the American dollar and kept markets on edge.
Canola also had technical support on perceptions that it was oversold.
Also positive for the market was news that Canada and China had agreed to extend their canola blackleg agreement for another year. The existing agreement was to expire July 31 but will continue for another year with the parties trying to work out a permanent solution.
China allows only a few ports to accept Canadian canola because of worries that blackleg disease on the seed will get into its rapeseed growing regions.
The result has been that China buys much more Canadian canola oil than it has in the past.
The USDA’s weekly crop progress report on Monday showed that the heat had knocked back the corn and soybean crop a little more than what analysts had expected.
The USDA said 62 percent of the U.S. corn crop was in good to excellent condition as of Sunday, down four points from a week earlier and 62 percent of soybeans were rated good to excellent, down from 64 percent.
Reuters News Service reported today it polled 14 analysts on corn yields. The range was 157.5 to 153.5 bushels per acre with an average 155.6 bu. That is down 3.1 bu. from USDA’s July 12 estimate of 158.7 bu.
Brokerage house FCStone puts the U.S. corn crop at about 13 billion bushels, well down from the latest USDA forecast of 13.47 billion.
Heat is returning to the southern Midwest and that too supported crop prices.
Oilseeds were further supported by a report from Oil World saying China was likely to start increasing is oilseed and vegetable oil imports in August after relatively slow movement for the past few months.
Winnipeg (per tonne)
Canola Nov 11 $555.00, up $3.10
Canola Jan 12 $563.30, up $3.20
Canola Mar 12 $570.10, up $2.80
Canola May 12 $574.80, up $2.40
The previous day’s best basis was one cent under the November contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 39. 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 $205, unchanged
Chicago (per tonne)
Soybeans Aug 11 $13.83, up 17.5 cents
Soybeans Sep 11 $13.8025, up 15.75
Soybeans Nov 11 $13.8875, up 16.75
Corn Sep 11 $6.8975, up 11.0
Corn Dec 11 $6.8675, up 12.25
Oats Sep 11 $3.5625, up 4.75
Oats Dec 11 $3.68, up 4.5
Minneapolis (per bushel)
Spring Wheat Sep 11 $8.39, up 8.25 cents
Spring Wheat Dec 11 $8.40, up 6.25
Spring Wheat Mar 12 $8.49, up 6.25
Light crude oil nearby futures in New York rose 39 cents to $99.59 US per barrel.
The Canadian dollar at noon was $1.0583 US, unchanged from the previous trading day. The U.S. dollar at noon was 94.49 cents Cdn. At one point in the day, the loonie climbed to $1.0625.
Worries about the U.S. deficit dispute and debt ceiling issue pressured stocks lower.
The Toronto Stock Exchange composite index closed down 135.39 points, or 1.01 percent, at 13,300.56.
The Standard & Poor’s 500 Index was down 4.79 points, or 0.36 percent, at 1,332.64.
