Canola futures rose Wednesday on support from export buying and rebounding soybeans and crude oil.
Traders appeared to believe that Tuesday’s sharp sell off was overdone.
The market remains unsure of canola seeded acreage. The price supports a large increase in area, but wet fields could make it difficult to seed everything that farmers would like to.
Light moisture is expected Thursday and Friday in Saskatchewan. There is a 90 percent possibility of precipitation for April 19 for much of the southern third of Saskatchewan. Regina is forecast to get up to five centimetres of snow and Assiniboia five to 10 cm.
Soybeans were supported by thoughts that the spread between corn and soybeans must not get too wide. The market needs more corn, but it can’t accept too large a fall in soybean production.
A system full of rain (see http://www.hpc.ncep.noaa.gov/qpf/p120i12.gif) is expected to move across the United States over the next few days.
The heaviest rain is expected to fall in Nebraska, with Iowa and South Dakota also getting good coverage.
This is expected to slow corn seeding.
Northern and eastern Kansas is also expected to get good rain from the system and that pressured Kansas City wheat futures.
But lesser amounts are expected in western Kansas and the rain is expected to miss the driest parts of the hard red winter wheat area in Oklahoma and Texas. (See the drought map at http://www.drought.unl.edu/dm/monitor.html)
A better chance for rain in Texas and Oklahoma comes around April 21-22.
Winnipeg (per tonne)
Canola May 11 $572.50, up $3.90
Canola Jul 11 $581.20, up $3.90
Canola Nov 11 $570.30, up $5.10
Canola Jan 12 $577.10, up $5.40
The previous day’s best basis widened to $15.50 under the May contract according to ICE Futures Canada in Winnipeg.
The May contract’s Relative Strength Index was 45. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley May 11 200, unchanged
Chicago (per bushel)
Soybeans May 11 $13.335, up 3.75 cents
Soybeans Jul 11 $13.45, up 4.0 cents
Soybeans Nov 11 $13.515, up 7.25 cents
Corn May 11 $7.555, up 3.0 cents
Corn Dec 11 $6.45, up 8.5 cents
Oats May 11 $3.8675, down 4.25 cents
Oats Dec 11 $4.04, down 4.0 cents (note change to new crop month)
Minneapolis (per bushel)
Spring Wheat May 11 $9.04, down 7.75 cents
Spring Wheat Jul 11 $9.12, down 7.5 cents
Spring Wheat Dec 11 $9.27, down 6.0 cents
Light crude oil nearby futures in New York rose 86 cents to $107.11 US per barrel.
The Canadian dollar at noon was $1.0373 US, down from $1.0390 the previous trading day. The U.S. dollar at noon was 96.40 cents Cdn.
The Bank of Canada left interest rates steady at one percent, as expected. But bank governor Mark Carney indicated that the strong loonie’s cooling effect on the Canadian economy might reduce the need to increase interest rates later this year.
The Toronto Stock Exchange composite index closed up 32.24 points, or 0.23 percent, at 13,833.64.
U.S. president Barack Obama released a budget reduction plan that would cut the U.S. budget deficit by $4 trillion over 12 years. He wants $3 of spending cuts for every $1 in tax increase.
Wall Street looked favourably on the plan.
The Standard & Poor’s 500 index rose 0.25 points, or 0.02 percent, to 1,314.41.
