Market wrap: USDA bullish for oilseeds, bearish for wheat

November canola at one point hit $500 per tonnes on Thursday supported by a bullish data on soybeans in the monthly USDA report.

But by the close the November contract had softened and closed at $495.70, up $2.20 or 0.45 percent.

Active farmer selling at the highs of the day were behind the late session weakness.

The canola harvest in Saskatchewan was 93 percent complete, the province said in a weekly crop progress report.

SOYBEAN SUPPLY FALLS

Soybeans closed up 2.77 percent, fueled mostly by a 3.7 percent increase in soy meal futures, but soy oil rose only 0.49 percent.

The trade generally thought the USDA would raise its soybean and corn yield forecasts but the report lowered the soybean yield to 49.5 bu. per acre from 49.9 last month. On average, the trade expected 50 bu. per acre.

The total soy production number 4.431 billion bu. did not change because USDA raised its estimate of harvested area.

But it trimmed by 45 million bushels its estimate of 2016-17 year end soy stocks to 430 million bu. and when that was worked into the supply and demand spreadsheet for 2017-18 it also resulted in a 45 million bu. decline in the ending stocks for the new crop year as well.

USDA also lowered its forecast for global 2017-18 year end stocks by about 1.5 million tonnes to 96.05 million tonnes.

Soybeans also got support from continuing dryness in Brazil’s northern soybean growing area. Southern areas are getting rain.

US CANOLA

U.S. canola growers harvested 20 percent more acres this year but yields were down 24 percent.

The bottom line is a forecast of 1.27 million tonnes of production, down nine percent from 1.4 million last year.

CORN

Corn firmed despite the USDA raising its U.S. corn yield estimate to 171.8 bu. per acre, above even the highest in a range of trade estimates.

WHEAT PRODUCTION RISES

Wheat futures fell as the USDA raised its production forecast for the European Union, Countries of the former Soviet Union and Canada.

It pegged global wheat production at 751.19 million tonnes, up 6.34 million tonnes.

It forecast global year-end wheat stocks at 268.13 million tonnes, up almost five million tonnes from last month and up 11.55 million from last year.

DELAYED HARVEST

The U.S. harvest is off to the slowest start in three years and some in the trade believe the slow pace might lead to declining yield forecasts in future USDA reports.

Reuters reported that in 2014, the last time harvest was slower than this year, the USDA’s final corn yield came in at 171.0 bushels per acre, 3.2 bushels below its October estimate. That knocked 259 million bushels from the final production figure.

However, soybean yields rose 0.4 bu. per acre, to 47.5 bu., between the October 2014 projection and the final report that year.

PRAIRIE HARVEST

The seven-day forecast looks fairly dry for most northern growing regions, which will be welcome. While most harvest is complete in southern and central areas, the north has a significant amount of crop still out.

Today’s Saskatchewan crop report said east-central and northeastern regions have 92 percent. The northwestern region has 87 percent combined.

On the weekend southern Manitoba could see showers.

OUTSIDE MARKETS

Light crude oil nearby futures in New York were down 70 cents at US$50.60 per barrel.

In the afternoon, the Canadian dollar was trading around US80.16 cents, down from 80.28 cents the previous trading day. The U.S. dollar was C$1.2475.

Corporations have begun posting their quarterly earnings reports and markets took a breather. Investors are hoping that financial results will back up the rally in stock valuations in recent months.

The Toronto Stock Exchange composite fell 58.20 or 0.37 percent to 15,742.20.

The Dow Jones Industrial Average fell 31.88 points, or 0.14 percent, to end at 22,841.01, the S&P 500 lost 4.31 points, or 0.17 percent, to 2,550.93 and the Nasdaq Composite dropped 12.04 points, or 0.18 percent, to 6,591.51.

 

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 17   495.70s   +2.20   +0.45%

Canola Jan 18   502.50s   +3.00   +0.60%

Canola Mar 18   507.40s   +3.00   +0.59%

Canola May 18   509.80s   +2.90   +0.57%

Canola Jul 18   510.80s   +2.70   +0.53%

 

Milling Wheat Oct 17   228.00s   -3.00   -1.30%

Milling Wheat Dec 17   231.00s   -3.00   -1.28%

Milling Wheat Mar 18   236.00s   -3.00   -1.26%

 

Durum Wheat Oct 17   279.00s   -1.00   -0.36%

Durum Wheat Dec 17   281.00s   unch   unch

Durum Wheat Mar 18   286.00s   unch   unch

 

Barley Oct 17   145.00s   unch   unch

Barley Dec 17   148.00s   unch   unch

Barley Mar 18   151.00s   unch   unch

 

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound. Prices are displayed with fractions (2/8, 4/8, and 6/8) instead of decimals. -2 equals .25, -4 equals .50, -6 equals .75. The “s” means it is the settlement.

 

Chicago

Soybeans Nov 17   992-0s   +26-6   +2.77%

Soybeans Jan 18   1002-4s   +26-4   +2.72%

Soybeans Mar 18   1012-0s   +26-4   +2.69%

Soybeans May 18   1021-2s   +26-2   +2.64%

Soybeans Jul 18   1029-4s   +25-6   +2.57%

 

Soybean Meal Oct 17   322.7s   +11.5   +3.70%

Soybean Meal Dec 17   326.3s   +11.4   +3.62%

Soybean Meal Jan 18   328.3s   +11.3   +3.56%

 

Soybean Oil Oct 17   33.07s   +0.16   +0.49%

Soybean Oil Dec 17   33.28s   +0.13   +0.39%

Soybean Oil Jan 18   33.45s   +0.12   +0.36%

 

Corn Dec 17   349-0s   +3-0   +0.87%

Corn Mar 18   362-6s   +3-2   +0.90%

Corn May 18   371-6s   +3-6   +1.02%

Corn Jul 18   379-2s   +3-4   +0.93%

Corn Sep 18   386-0s   +3-0   +0.78%

 

Oats Dec 17   261-6s   +9-0   +3.56%

Oats Mar 18   263-6s   +8-4   +3.33%

Oats May 18   264-6s   +10-2   +4.03%

Oats Jul 18   261-0s   +8-2 +3.26%

Oats Sep 18   261-0s   +8-2   +3.26%

 

Wheat Dec 17   430-4s   -2-6   -0.63%

Wheat Mar 18   449-4s   -2-6   -0.61%

Wheat May 18   461-6s   -3-0   -0.65%

Wheat Jul 18   475-2s   -3-2   -0.68%

Wheat Sep 18   491-2s   -3-0   -0.61%

 

Minneapolis

Spring Wheat Dec 17   611-2s   -7-6   -1.25%

Spring Wheat Mar 18   625-0s   -7-6   -1.22%

Spring Wheat May 18   631-4s   -7-6   -1.21%

Spring Wheat Jul 18   635-4s   -7-0   -1.09%

Spring Wheat Sep 18   629-2s   -8-0   -1.26%

 

Kansas City

Hard Red Wheat Dec 17   426-2s   -2-0   -0.47%

Hard Red Wheat Mar 18   444-4s   -2-0   -0.45%

Hard Red Wheat May 18   458-6s   -2-0   -0.43%

Hard Red Wheat Jul 18   476-6s   -2-2   -0.47%

Hard Red Wheat Sep 18   495-4s   -2-2   -0.45%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Oct 17   112.350s   -1.425   -1.25%

Live Cattle Dec 17   117.275s   -1.250   -1.05%

Live Cattle Feb 18   121.200s   -0.975   -0.80%

 

Feeder Cattle Oct 17   153.550s   -0.600   -0.39%

Feeder Cattle Nov 17   154.550s   -1.125   -0.72%

Feeder Cattle Jan 18   152.250s   -2.000   -1.30%

 

Lean Hogs Oct 17   60.700s   -0.550   -0.90%

Lean Hogs Dec 17   61.625s   -0.875   -1.40%

Lean Hogs Feb 18   66.825s   -0.950   -1.40%

 

 

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