Predicted gigantic U.S. crop weighs down crop futures

Bigger than expected crop forecasts from the U.S. Department of Agriculture today pressured grain prices down to fresh multi-year lows.

Canola continued to fall as it has done all week but today’s decline was not as steep as soybean’s, perhaps reflecting a little concern about the bad weather in Alberta where temperatures fell as low as -4 to -6 C in a large part of the central region early Thursday morning. Also, snow over the past few days has flattened many crops in the province.

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The frost threat continues tonight, but then the weather is expected to improve with a string of sunny, warmer days.

U.S. crop prices fell upon the release of the USDA report but a late rally bounced corn and soybeans off the day’s lows, perhaps reflecting concerns about frost forecast for the northern cornbelt Friday morning.

The USDA raised its forecasts for wheat production in Russia, Ukraine, Australia and the European Union world wheat production estimate to 719.95 million tonnes from 716.09 million in August. Last year’s crop was 714.05 million.

USDA also raised its forecast of U.S. 2014-15 wheat ending stocks above trade expectations, reflecting a reduced U.S. export projection.

That drove the Chicago September wheat contract briefly below $5, the first sub-$5 price since 2010. It closed at $5.03 a bushel, down 15.75 cents.

December Minneapolis spring wheat fell six cents to $5.9275.

The USDA increased its yield estimates leading analysts to expect that even higher yields could be in future reports as the Midwest continues to enjoy mostly good weather.

The USDA projected the average U.S. corn yield at 171.7 bushels an acre, above its August estimate of 167.4 bu., and the soy yield at 46.6 bu., an acre, up from 45.4 bu. last month.

Analysts had expected a corn yield of 170.7 bu. and a soy yield of 46.3 bu., according to a Reuters poll.

Last year’s corn yield was 158.8 bu. per acre for this year up almost 13 bu. or eight percent.

The USDA pegged the corn crop at 14,395 billion bu. The average of analysts’ estimates was 14.288 billion bu. Last month the USDA forecast 14.032 billion bu. Last year’s crop was 13.925 billion bu.

USDA pegged the U.S. soybean crop at 3.913 billion bu., above the average of analysts’ estimates of 3.883 billion. The August USDA forecast was 3.816 billion. Last year’s crop was 3.289 billion bu.

Global corn production was seen at 987.52 million tonnes, up from 985.39 million in August. Global ending stocks were pegged at 189.91 million tonnes, up from 187.82 in August and 173.08 million last year.

U.S. production was up about nine million tonnes from August, more than offsetting a five million tonne decline in China’s crop outlook, to 217 million tonnes, from 222 million in August.

Check out today’s Western Producer newspaper for stories on rising durum prices, the blending benefit of having good 2013 crop still in storage and new Chinese yellow pea processing capacity creating additional demand for the crop.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014 411.20 -3.50 -0.84%

Canola Jan 2015 415.80 -3.40 -0.81%

Canola Mar 2015 421.40 -2.80 -0.66%

Canola May 2015 425.60 -2.20 -0.51%

Canola Jul 2015 429.30 -1.80 -0.42%

Milling Wheat Oct 2014 194.00 -3.00 -1.52%

Milling Wheat Dec 2014 201.00 -2.00 -0.99%

Milling Wheat Mar 2015 210.00 -2.00 -0.94%

Durum Wheat Oct 2014 288.80 unch 0.00%

Durum Wheat Dec 2014 294.80 unch 0.00%

Durum Wheat Mar 2015 295.80 unch 0.00%

Barley Oct 2014 124.00 unch 0.00%

Barley Dec 2014 126.00 unch 0.00%

Barley Mar 2015 127.00 unch 0.00%

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

Chicago

Soybeans Sep 2014 1061.5 -9.5 -0.89%

Soybeans Nov 2014 981.5 -12.25 -1.23%

Soybeans Jan 2015 988.25 -12 -1.20%

Soybeans Mar 2015 993.75 -12 -1.19%

Soybeans May 2015 1000.75 -11.75 -1.16%

Soybeans Jul 2015 1007 -11.5 -1.13%

Soybean Meal Sep 2014 426.7 -16.1 -3.64%

Soybean Meal Oct 2014 338.8 -10.2 -2.92%

Soybean Meal Dec 2014 329.2 -8 -2.37%

Soybean Oil Sep 2014 31.44 -0.14 -0.44%

Soybean Oil Oct 2014 31.5 -0.13 -0.41%

Soybean Oil Dec 2014 31.71 -0.12 -0.38%

Corn Sep 2014 331.75 -7 -2.07%

Corn Dec 2014 341 -4.75 -1.37%

Corn Mar 2015 353.5 -5 -1.39%

Corn May 2015 362 -4.75 -1.30%

Corn Jul 2015 369.25 -4.75 -1.27%

Oats Sep 2014 383.75 -3 -0.78%

Oats Dec 2014 353.75 -3 -0.84%

Oats Mar 2015 335 -1.5 -0.45%

Oats May 2015 325.75 -1.75 -0.53%

Oats Jul 2015 321.5 +0.25 +0.08%

Wheat Sep 2014 503 -15.75 -3.04%

Wheat Dec 2014 509.5 -10.25 -1.97%

Wheat Mar 2015 526.25 -9.75 -1.82%

Wheat May 2015 537.25 -10.25 -1.87%

Wheat Jul 2015 546.5 -11.25 -2.02%

Minneapolis

Spring Wheat Sep 2014 599 -15 -2.44%

Spring Wheat Dec 2014 592.75 -6 -1.00%

Spring Wheat Mar 2015 607.75 -5.75 -0.94%

Spring Wheat May 2015 619 -4.75 -0.76%

Spring Wheat Jul 2015 627.5 -4.5 -0.71%

Kansas City

Hard Red Wheat Sep 2014 595.75 -9.5 -1.57%

Hard Red Wheat Dec 2014 606.25 -9.25 -1.50%

Hard Red Wheat Mar 2015 613.5 -8.25 -1.33%

Hard Red Wheat May 2015 617.75 -7.25 -1.16%

Hard Red Wheat Jul 2015 607.25 -7.25 -1.18%

Light crude oil nearby futures in New York rose $1.16 at $92.83 US per barrel.

The Canadian dollar at noon was 90.65 cents US, down from 91.28 cents the previous trading day. The U.S. dollar at noon was $1.1032 Cdn.

The TSX composite rose 62.43 points or 0.40 percent to 15,534.32.

The Dow Jones industrial average fell 19.78 points, or 0.12 percent, to 17,048.93, the S&P 500 gained 1.67 points, or 0.08 percent, to 1,997.36 and the Nasdaq Composite added 5.28 points, or 0.12 percent, to 4,591.81.