Profit taking, plant explosion hammer canola lower

By D’Arce McMillan

Markets Editor

Twitter @ darcemcmillan

Canola futures posted a disappointing ending to the week, falling 1.84 percent on Friday on expectations of better U.S. harvest progress and an accident at a Yorkton, Sask., crushing plant.

On the week, November canola rose just 50 cents per tonne.

The spread between November and January narrowed to just 40 cents a tonne.

An explosion at the Louis Dreyfus crushing plant at Yorkton Friday morning that apparently did major damage compounded the pressure on canola.

The plant is one of the larger ones in the country with a capacity of 850,000 tonnes a year. The explosion was in an area where canola pellets are stored.

At this early point it is unclear how much, if any, of the processing plant was damaged or how long the plant will be out of commission.

However, if there is a period of down time, the loss might be offset by the ramping up of production at the new Bunge expansion at Altona, Man.

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Another factor weighing on canola is the idea that the crop is larger than the Statistics Canada estimate. Saskatchewan Agriculture this week estimated the average provincial yield at 32 bushels an acre. StatCan had put the yield at 30 bu. per acre.

The main reason for the general crop price decline today was a wave of profit taking that hit the market midmorning when traders turned their attention to weather in the Midwest, which has become drier and more conducive to harvest progress.

Traders took profits in the soybean complex, corn and wheat after the gains early in the week that were triggered by the delayed harvest and strong weekly U.S. export sales.

Soybeans touched $10 a bushel before the sell off.

The other factor that had been supporting soybeans this week was dry weather in central Brazil, but the forecast is for rain next week. Farmers had halted seeding because the soil was too dry to allow germination. Once it rains, planting will resume.

In addition to the weather, one factor to watch next week will be whether American farmers are forced to start to sell grain to make space for the huge harvest. They have been slow to sell, trying to force buyers to increase prices.

Light crude oil nearby futures in New York fell $1.08 to US$81.01 per barrel.

The Canadian dollar at noon was 89.18 cents US, up from 88.99 cents the previous trading day. The U.S. dollar at noon was $1.1213 Cdn.

Canadian fertilizer maker Agrium climbed 7.6 percent to $104.33 after hedge fund ValueAct Capital disclosed it had bought a 5.7 percent stake.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 56.99 points, or 0.39 percent, at 14,543.82.

The index made its largest one-week gain in a year, climbing 2.2 percent

The Dow Jones industrial average rose 127.51 points, or 0.76 percent, to 16,805.41, the S&P 500 gained 13.76 points, or 0.71 percent, to 1,964.58 and the Nasdaq Composite added 30.92 points, or 0.69 percent, to 4,483.72.

The S&P 500 rose 4.1 percent for the week, its biggest gain since January 2013.

For more detail on the grain markets, check out our video report.

ICE Futures Canada – dollars per tonne

Canola Nov 2014 411.00 -7.70 -1.84%

Canola Jan 2015 411.40 -9.90 -2.35%

Canola Mar 2015 414.00 -11.10 -2.61%

Canola May 2015 417.10 -11.10 -2.59%

Canola Jul 2015 418.30 -11.00 -2.56%

Milling Wheat Dec 2014 225.00 -1.00 -0.44%

Milling Wheat Mar 2015 231.00 unch0.00%

Milling Wheat May 2015 234.00 unch0.00%

Durum Wheat Dec 2014 356.50 unch0.00%

Durum Wheat Mar 2015 357.50 unch0.00%

Durum Wheat May 2015 357.50 unch0.00%

Barley Dec 2014 137.00 unch0.00%

Barley Mar 2015 140.00 unch0.00%

Barley May 2015 140.00 unch0.00%

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

Chicago

Soybeans Nov 2014977.5 -15.75 -1.59%

Soybeans Jan 2015 983.25 -16.75 -1.68%

Soybeans Mar 2015990 -16.5 -1.64%

Soybeans May 2015996.75 -15.75 -1.56%

Soybeans Jul 2015 1002.25 -15.25 -1.50%

Soybeans Aug 20151002.75 -15 -1.47%

Soybean Meal Dec 2014 350.2 -2.2 -0.62%

Soybean Meal Jan 2015 338.8 -3.2 -0.94%

Soybean Meal Mar 2015 327.4 -5.2 -1.56%

Soybean Oil Dec 2014 32.39 -0.28 -0.86%

Soybean Oil Jan 2015 32.64 -0.28 -0.85%

Soybean Oil Mar 2015 32.9-0.27 -0.81%

Corn Dec 2014353 -6.75 -1.88%

Corn Mar 2015366.75 -6.75 -1.81%

Corn May 2015375.25 -6.75 -1.77%

Corn Jul 2015 382.75 -6.75 -1.73%

Corn Sep 2015390.25 -6.25 -1.58%

Oats Dec 2014351.75 -8.75 -2.43%

Oats Mar 2015339.75 -8.25 -2.37%

Oats May 2015332.5 -7 -2.06%

Oats Jul 2015 323.75 -5.25 -1.60%

Oats Sep 2015325 -7 -2.11%

Wheat Dec 2014 517.75 -9 -1.71%

Wheat Mar 2015 531 -9.25 -1.71%

Wheat May 2015 538.75 -9.25 -1.69%

Wheat Jul 2015 546.25 -9 -1.62%

Wheat Sep 2015 555.75 -9 -1.59%

Minneapolis

Spring Wheat Dec 2014 567 -4 -0.70%

Spring Wheat Mar 2015 578 -2.25 -0.39%

Spring Wheat May 2015 585.75 -2 -0.34%

Spring Wheat Jul 2015 594.25 -1.25 -0.21%

Spring Wheat Sep 2015 602.25 -1.25 -0.21%

Kansas City

Hard Red Wheat Dec 2014 593.75 -11.5 -1.90%

Hard Red Wheat Mar 2015 596.25 -11.5 -1.89%

Hard Red Wheat May 2015 596.25 -11 -1.81%

Hard Red Wheat Jul 2015590.5 -9.5 -1.58%

Hard Red Wheat Sep 2015 602 -9.5 -1.55%

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