Canola and other crop futures fell again Tuesday on expectations that 2013 crops around the globe will be larger and shortages will be reduced.
Improving weather in South American, as well as snow and rain in the dry hard red winter wheat region of the U.S. southern Plains added to the downward pressure.
The Canadian dollar rose about a third of a cent, adding to pressure on canola.
Australia increased its estimate of the size of its canola crop to 3.089 million tonnes, up from a December estimate of 2.636 million tonnes.
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Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
March canola ended at $622.00, down $7.50. November closed at $545.70, down $4.20
Canola basis had got quite low during last week’s rally but the big drops since Friday are causing the basis to improve in farmers’ favour.
The moisture in the southern Plains, two to six inches of snow, is welcome after many weeks of dry weather. But the dormant winter wheat crop still needs much more moisture.
Wheat was also pressured when Australia slightly increased the size of its wheat crop to 22.077 million tonnes from its December estimate of 22.035 million tonnes.
The predicted shift of wheat demand to North American suppliers from the Black Sea region isn’t happening so far. Recent weekly U.S. wheat exports have been dismal.
China has been celebrating the New Year holiday this week and that could be adding to the subdued tone to the market.
• The USDA yesterday released its annual long-term base line projections for crop and livestock production and demand. The projections are based on historical trends and so are less directly applicable to the coming year than its projections that will be made later this month at the annual outlook conference.
However, the general tenor of the base line projection report was that if moisture and temperatures this summer revert to the long-term norms, then production of corn, soybeans and wheat will more than adequate and will pressure prices substantially lower than the last two years.
With the boom in ethanol expansion over, normal yield increases will be able to keep up better with trendline increases in demand. Crop prices will be off the level of the last two years, but still be better than the pre 2007 period.
Winnipeg ICE Futures (per tonne)
Canola Mar 13 $622.00, down $7.50 -1.19%
Canola May 13 $609.40, down $5.80 -0.94%
Canola Jul 13 $594.20, down $5.80 -0.97%
Canola Nov 13 $545.70, down $4.20 -0.76%
Milling Wheat Mar 13 $291.00, unchanged
Milling Wheat May 13 $294.00, unchanged
Milling Wheat Jul 13 $296.00, unchanged
Milling Wheat Oct 13 $296.00, unchanged
Durum Wheat Mar 13 $309.20, unchanged
Durum Wheat May 13 $313.20, unchanged
Durum Wheat Jul 13 $316.20, unchanged
Durum Wheat Oct 13 $301.50, unchanged
Barley Mar 13 $241.50, unchanged
Barley May 13 $242.50, unchanged
Barley Jul 13 $243.00, unchanged
Barley Oct 13 $243.00, unchanged
Chicago (per bushel)
Soybeans (P) Mar 13 $14.2075, down 10.75 cents -0.75% Soybeans (P) May 13 $14.095, down 7-6 -0.55%
Soybeans (P) Jul 13 $14.01, down 6-0 -0.43%
Soybeans (P) Aug 13 $13.6675, down 2-4 -0.18%
Soybeans (P) Sep 13 $13.0875, down 1-0 -0.08%
Soybeans (P) Nov 13 $12.76, up 7.5 +0.59%
Corn (P) Mar 13 $6.9625, down 6.0 -0.85%
Corn (P) May 13 $6.955, down 6.0 -0.86%
Corn (P) Jul 13 $6.87, down 5.0 -0.72%
Corn (P) Sep 13 $5.8125, up 3.75 +0.65%
Corn (P) Dec 13 $5.63, up 4.25 +0.76%
Oats (P) Mar 13 $3.7775, down 3.25 -0.85%
Oats (P) May 13 $3.6975, down 2.75 -0.74%
Oats (P) Jul 13 $3.68, down 1.5 -0.41%
Oats (P) Sep 13 $3.6725, down 1.5 -0.41%
Oats (P) Dec 13 $3.64, down 1.5 -0.41%
Minneapolis (per bushel)
Spring Wheat Mar 13 $8.16, down 10.0 cents -1.21%
Spring Wheat May 13 $8.3075, down 8.5 -1.01%
Spring Wheat Jul 13 $8.4075, down 8.5 -1.00%
Spring Wheat Sep 13 $8.45, down 7.0 -0.82%
Spring Wheat Dec 13 $8.5175, down 5.75 -0.67%
The Bank of Canada noon rate for the loonie was 99.71 cents US, up from 99.35 on Monday. The U.S. buck was $1.0029 Cdn.
Crude oil in New York rose 48 cents to $97.51 per barrel.
Stock markets were waiting for U.S president Barack Obama’s state of the union address tonight that is expected to focus in part on the economy and jobs.
Markets are finding it difficult to find reasons to drive shares higher after the S&P 500 hit a five-year high on Feb. 1 and the Dow is about one percent away from its all time high set in October 2007.
In early tallies —
The Toronto Stock Exchange’s S&P/TSX composite index rose 40.87 points, or 0.32 percent, to close at 12,789.02.
The Dow Jones industrial average rose 47.77 points, or 0.34 percent, to 14,019.01.
The Standard & Poor’s 500 Index was up 2.43 points, or 0.16 percent, closing at 1,519.44.
The Nasdaq Composite Index fell 5.51 points, or 0.17 percent, to 3,186.49.
