Weather worries and a weaker Canadian dollar supported canola futures Wednesday.
In addition to the excess moisture problems in most of the Prairies, canola production prospects are being hurt by excessively dry conditions in the Peace River district.
The market did not react to the Statistics Canada acreage survey report released Wednesday morning. The survey was conducted in late May and early June and so reflected growers’ thoughts before the heavy rain that prevented much seeding in June.
StatsCan recognized this in its report.
“As a result of continued inclement weather in Western Canada, estimates of planted areas may change considerably in the July farm survey, the results of which will be released on Aug. 20,” the report said.
The report put canola area at 17.89 million acres, up 10.5 percent from last year. The trade believes a more realistic number is 15 to 16 million acres.
Bloomberg reported that Linn Group, a commodity research and brokerage company in Chicago, said rapeseed production in China could be up to 15 percent less than predicted by the U.S. Department of Agriculture. It said production could be 1.5 to two million tonnes less than the 13 million tonnes forecast by the U.S. Department of Agriculture June 10. Last year, China grew 11.825 million tonnes of rapeseed, according to the USDA.
In Winnipeg, July canola rose $5 per tonne Wednesday to $431.70 on 4,671 trades.
The previous day’s best basis widened to $7.50 per tonne off the July contract in the par region, according to the Winnipeg ICE Futures daily report.
The 14-day Relative Strength Index for July canola was 84, according to BarChart.com. The rule of thumb is that an RSI of 30 indicates an oversold market and 70 indicates overbought.
For another aspect of technical analysis, seed Ed White’s blog today at www.producer.com and at www.producermobile.com.
New crop November canola rose $1.70 per tonne to $426.90 on 15,369 trades.
The Canadian dollar at noon was 95.84 cents US, down sharply from 98.03 cents at noon the previous trading day. The U.S. dollar at noon was $1.0434 Cdn.
The weaker loonie was attributed to weaker crude oil prices and a larger-than-expected decline of two percent in Canadian retail sales in April. The market had anticipated a drop of 0.4 percent.
There was no trade in Winnipeg barley. July was $155. October was $150.40. December was $150.40.
Chicago July soybeans fell 7.5 cents to $9.58 US per bushel; new-crop November fell 12.5 cents to $9.235.
July oats were higher early but closed down three cents to $2.75 per bu. December oats fell two cents to $2.77 per bu.
In New York, crude oil for July delivery fell 1.50 to $76.35 per barrel.
The U.S. weekly oil data that the federal Energy Information Administration reported Wednesday showed a larger-than-expected increase in U.S. crude oil inventories.
