A partial rebound in equity markets helped grain futures rise on Tuesday but canola and soybeans dipped lower.
Soybeans initially rose with the stock market, but when equities came off their highs beans also started to fall, pressured by good growing weather in the U.S. Midwest and by falling crude oil prices.
Canola took its cue from soybeans and also retreated slightly.
Good weather on the Prairies added to pressure on canola.
Brazil increased its estimate of its recently harvested soybean crop to a record 75.3 million tonnes, from 75 million tonnes projected in July.
Soybeans were also pressured by the improvement in soybean crop condition rating in Monday’s USDA crop report.
Corn edged higher, helped by a two percentage point drop in its good-to-excellent rating on Monday.
Wheat rode corn’s coattails.
USDA will update its crop yield and production forecasts on Thursday.
Approval was given today for the Chicago corn contract to widen its daily margin to 40 cents per bushel from 30 cents. Also, on days following a limit move the limit will expand to a maximum of 60 cents from the current maximum of 45 cents.
This is the first increase in the trading limit since March 2008.
Equity markets opened with a strong bounce off Monday’s rout but then gave back ground before rallying again into the close.
The U.S. Federal Reserve said on Tuesday it will keep U.S. interest rates near zero for at least another two years, but that disappointed traders who hoped for more action.
The U.S. central bank also signaled that it was prepared to do more if necessary, noting that it still has tools available for spurring growth and will use them if necessary. It said U.S. economic growth was weaker than expected, suggesting inflation, which has already moderated recently, would remain contained for the foreseeable future.
This keeps the door open for a third round of quantitative easing, or bond buying, to increase the U.S. money supply.
The Canadian dollar was fairly steady with the U.S. dollar, but the American buck dropped sharply against the Swiss franc and the Japanese yen.
Winnipeg (per tonne)
Canola Nov 11 $541.30, down $1.60
Canola Jan 12 $549.50, down $1.30
Canola Mar 12 $554.40, down $0.60
Canola May 12 $558.10, unchanged
Western Barley Oct 11 $205, unchanged
The previous day’s best basis was $15 under the November contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 33. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Oct 11 $205, unchanged
Chicago (per bushel)
Soybeans Aug 11 $12.9875, down 10.5 cents
Soybeans Sep 11 $12.9325, down 11.25
Soybeans Nov 11 $12.9975, down 11.75
Corn Sep 11 $6.81, up 5.75
Corn Dec 11 $6.915, up 5.5
Oats Sep 11 $3.34, up 4.25
Oats Dec 11 $3.45, up 3.5
Minneapolis (per bushel)
Spring Wheat Sep 11 $8.1675, up 11.5 cents
Spring Wheat Dec 11 $8.2125, up 10.75
Spring Wheat Mar 12 $8.3075, up 11.5
Light crude oil nearby futures in New York fell $2.01 to $79.30 US per barrel. Reports from the U.S. government and OPEC today reduced the outlook for oil demand growth because of the weak economic growth in developed countries.
The Canadian dollar at noon was $1.0108 US, down from $1.0111 the previous trading day. The U.S. dollar at noon was 98.93 cents Cdn.
The Toronto Stock Exchange composite index unofficially closed up 437.13 points, or 3.75 percent, at 12,108.09.
The Standard & Poor’s 500 Index unofficially jumped 53.18 points, or 4.75 percent, to close at 1,172.64.
