Markets fret over weak response to USDA's bullish corn news; canola closes lower

Canola futures fell Monday while spring wheat futures rose in reaction to the monthly U.S. Department of Agriculture supply and demand report.

USDA trimmed its domestic and world corn ending stocks but that wasn’t enough to stop it slipping into the red during the Monday trading session after showing early strength. Corn closed lower and some analysts expressed worry about the inability of the contract to rally on bullish news.

Neutral news in the USDA report for soybeans had the same affect.

Oats followed corn into negative territory, with the volatile nearby oats futures contract banging down about 14 cents per bushel. The May contract was little changed.

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Oats futures at the Chicago Board of Trade have trended steadily lower for the past three months, with cash bids in Western Canada seeing a similar trend.

USDA found that corn exports were higher than most market players were expecting. Wheat exports have also been strong.

The projected 2013-14 domestic corn ending stocks-to-use ratio for corn fell to 11.1 percent in the February report from about 13.7 percent in December and 12.4 in January.

USDA raised its wheat carryout forecast in January, but reversed that in the February report.

Chicago March wheat closed up 1.26 percent while Minneapolis wheat rose 1.92 percent.

USDA slightly raised soybean exports but didn’t lower ending stocks. It also raised Brazilian production one million tonnes to 90 million tonnes and boosted export estimates for that country, leaving oilseeds with a negative tone. It trimmed Argentina’s soybean crop 500,000 tonnes to 54 million.

Canola fell during the session to new lows before closing at $421.50 for the March contract at the bottom of its recent trading range. For about three weeks canola has bounced along the $422 per tonne level, rising towards $435 before slipping back into the $420s. The new low won’t raise any hopes for a rally.

The weakness of corn prices in the face of good news raised questions about the underlying strength of the recent recovery in prices. The major three crops, corn, soybeans and wheat, have been rising for a couple of weeks, allowing some to hope the lows of the 2013-14 year have been marked.

Monday was a relative flat day for the overall commodities complex and world stock markets were similarly flat.

Last week’s volatile equity markets action, which saw at first major losses then big gains, have left many unsure of the underlying spirits of the market.

Winnipeg ICE Futures Canada dollars per tonne

Canola Mar 2014 421.50 -4.10 -0.96%

Canola May 2014 431.80 -3.80 -0.87%

Canola Jul 2014 441.20 -3.60 -0.81%

Canola Nov 2014 456.80 -3.40 -0.74%

Canola Jan 2015 463.20 -3.50 -0.75%

Milling Wheat Mar 2014 188.00 +1.00 +0.53%

Milling Wheat May 2014 187.00 unch 0.00%

Milling Wheat Jul 2014 188.00 unch 0.00%

Durum Wheat Mar 2014 245.00 unch 0.00%

Durum Wheat May 2014 249.00 unch 0.00%

Durum Wheat Jul 2014 250.00 unch 0.00%

Barley Mar 2014 126.50 unch 0.00%

Barley May 2014 128.50 unch 0.00%

Barley Jul 2014 128.50 unch 0.00%

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

Chicago

Soybeans Mar 2014 1325.5 -6 -0.45%

Soybeans May 2014 1312.25 -5.25 -0.40%

Soybeans Jul 2014 1295.5 -2.5 -0.19%

Soybeans Aug 2014 1249.5 -1.5 -0.12%

Soybeans Sep 2014 1170 -4.5 -0.38%

Soybeans Nov 2014 1116.25 -5.5 -0.49%

Soybean Meal Mar 2014 444 -2.4 -0.54%

Soybean Meal May 2014 426.9 -3 -0.70%

Soybean Meal Jul 2014 416.1 -1.6 -0.38%

Soybean Oil Mar 2014 38.73 +0.17 +0.44%

Soybean Oil May 2014 39.04 +0.16 +0.41%

Soybean Oil Jul 2014 39.35 +0.17 +0.43%

Corn Mar 2014 443 -1.25 -0.28%

Corn May 2014 448.75 -1.25 -0.28%

Corn Jul 2014 454.75 -0.75 -0.16%

Corn Sep 2014 456 -1 -0.22%

Corn Dec 2014 458.25 -1.75 -0.38%

Oats Mar 2014 422 -14.5 -3.32%

Oats May 2014 364 -2.75 -0.75%

Oats Jul 2014 329.25 -4 -1.20%

Oats Sep 2014 315.25 +0.75 +0.24%

Oats Dec 2014 307.75 +2.75 +0.90%

Wheat Mar 2014 584.75 +7.25 +1.26%

Wheat May 2014 585 +5.75 +0.99%

Wheat Jul 2014 589.75 +6 +1.03%

Wheat Sep 2014 598.25 +6.25 +1.06%

Wheat Dec 2014 611 +6.25 +1.03%

Minneapolis

Spring Wheat Mar 2014 651.5 +12.25 +1.92%

Spring Wheat May 2014 628.75 +9.5 +1.53%

Spring Wheat Jul 2014 629.25 +7 +1.12%

Spring Wheat Sep 2014 635.25 +5.75 +0.91%

Spring Wheat Dec 2014 647.25 +6 +0.94%

Kansas City

KCBT Red Wheat Mar 2014 662.75 +13.5 +2.08%

KCBT Red Wheat May 2014 649.25 +10.75 +1.68%

KCBT Red Wheat Jul 2014 638.25 +11.5 +1.83%

KCBT Red Wheat Sep 2014 645.5 +11.25 +1.77%

KCBT Red Wheat Dec 2014 655.5 +9.75 +1.51%

Light crude oil nearby futures in New York rose 18 cents at $100.06 US per barrel.

The Canadian dollar at noon was 90.51 cents US, down from 90.76 cents the previous trading day. The U.S. dollar at noon was $1.1048 Cdn.

The Toronto Stock Exchange composite rose 7.68 point or 0.06 percent to 13,794.18.

The Dow Jones industrial average was up 7.71 points, or 0.05 percent, at 15,801.79.

The Standard & Poor’s 500 Index was up 2.82 points, or 0.16 percent, at 1,799.84.

The Nasdaq Composite Index was up 22.31 points, or 0.54 percent, at 4,148.17.

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