Stronger soybean prices offset the negative effect of a stronger Canadian dollar, allowing Winnipeg new crop canola futures to hold steady to slightly stronger Friday.
Agriculture Canada released a production forecast late Thursday. It put the canola crop at 10.5 million tonnes, down from 11.825 million tonnes in the current crop year that ends July 31. With a carry-in of 1.3 million tonnes, that put the total available supply for 2010-11 at 11.925 million tonnes.
Exports were put at six million tonnes, down from 7.4 million tonnes, and domestic crush was estimated at 4.7 million tonnes, up from 4.5 million tonnes.
That left the carry-out for 2010-11 at a tight 750,000 tonnes, down from 1.3 million tonnes in the current year.
The U.S. Department of Agriculture’s report that was released Friday put soybean ending stocks for the current year and next year a little higher than expected. The news was slightly bearish, but strong exports and a firm cash market drove soybeans futures higher.
The loonie surged higher after a report that showed Canadian employment grew by 93,200 jobs in June, far more than the predicted 15,000 gain.
The employment growth raised the possibility of the Bank of Canada raising interest rates at its July 20 meeting.
July canola fell $4 per tonne to $438.70 on 42 trades. The July contract has moved into delivery mode and expires July 14.
The July contract rose $5.90 over the week.
New crop November canola, the most traded contract, was steady at $434.70 on 9,023 trades.
The November contract rose $12.90 over the week.
The January contract rose 30 cents Friday to $435.30 on 1,625 trades.
The previous day’s best basis was $3 per tonne off the November contract in the par region, according to the Winnipeg ICE Futures daily report.
The 14-day Relative Strength Index for July canola was 62, according to BarChart.com. November’s RSI was 68. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
The Canadian dollar at noon was 96.82 cents US, up from 95.73 cents at noon the previous trading day. The U.S. dollar at noon was $1.0328.
Winnipeg July barley was steady and untraded at $172. October rose 30 cents to $156.50 and December also rose 30 cents to $156.50.
Chicago July soybeans rose 13 cents to $10.255 US per bushel; new-crop November rose 7.25 cents to $9.5325.
July oats rose 8.5 cents to $2.58 per bu. December oats rose 7.75 cents to $2.7125 per bu.
July oats rose 15 cents over the week.
In New York, crude oil for August delivery rose 65 cents to $76.09 US per barrel.
The Canadian Oilseed Processors Association reported that members crushed 105,591 tonnes of canola in the week ending July 7, up 1.8 percent from the previous week. That represented a capacity use of 83.7 percent.
To date, the crush stands at 4.25 million tonnes, up from 3.79 million tonnes at the same time last year.
ICE Canada is raising margins on canola and barley trading.
Clearinghouse margins, which are equal to maintenance margins, will rise $20 for canola to $220 for one outright position and to $120 for barley.
The clearinghouse margin for inter-crop year spreading rises $60 to $160 for canola but is unchanged for barley at $80.
Initial margins on outright positions increase $27 to $297 per canola contract and to $162 for barley. Initial margins on inter-crop year spreading rise $81 to $216 per canola contract.
