Canola’s two-day rally ended with January settling down by 90 cents, weighed down by lower soybeans, soy meal and soy oil.
It was a down day across almost all crop markets with corn and wheat pressured by ample supplies and China’s rejection of a total of 600,000 tonnes of U.S. corn because of the presence of an unapproved GM variety.
Soybeans fell on profit taking and technical selling. Soy meal fell as traders exited long soymeal/short soy oil spreads
The lead soy oil contract at one point fell to 38.96 cents per pound, the lowest spot price on the continuous chart since August 2010, before paring losses, Reuters reported
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The direction of canola futures is hard to determine. Some traders expect it to reach new lows in the near term due to burdensome Canadian canola supplies, despite already falling to three-year lows last week.
Price movement in the soybean complex will be important for canola. One possible plus for soybeans would come if the U.S. Department of Agriculture in January revises up its estimate/forecast of soybean demand for last year and this year. Some measures show more soybeans were exported than has been accounted for in USDA’s monthly supply and demand report.
Another factor is South American weather. Conditions in Brazil remain favourable for the most part but Argentina is getting a bit dry with a spate of hot weather.
U.S. STIMULUS BEGINS WIND DOWN
In the wider markets, the biggest news of the day was the U.S. Federal Reserve finally announced a first step in tapering its stimulus bond buying program.
It will drop the amount of buying to $75 billion a month, down $10 billion.
The Fed tempered the long-awaited move by suggesting its key interest rate would stay lower for even longer than previously promised.
Stock markets initially dipped but then rose with the Dow and S&P 500 hitting a record high.
Although its official bank interest rate will stay low, the simulative bond buying program has served to keep other types of interest rates exceptionally low. As the simulative program winds down, U.S. interest rates should creep up and that should lift the U.S. dollar relative to other currencies, including the loonie. The relationship of the U.S. buck to the loonie is also likely to be affected by the Bank of Canada’s recent decision to drop talk about raising interest rates in the near future.
ACREAGE FORCASTS
Informa Economics on Wednesday trimmed its U.S. acreage forecast for soybeans and lifted its corn number a little, Reuters reported.
It projected 2014 U.S. soy area at 81.9 million acres, still a record, but down from 83.8 million previously.
Corn plantings were raised to 91.846 million versus the previous estimate of 91.546 million.
Last spring U.S. farmers seeded 95.3 million corn acres and 76.5 million soybean acres.
Informa pegged U.S. all-wheat plantings for 2014 at 57.855 million acres, down from its previous estimate of 58.1 million.
Seeded area of the last crop was 56.2 million acres.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2014 445.70 -0.90 -0.20%
Canola Mar 2014 456.10 -1.00 -0.22%
Canola May 2014 465.80 -0.70 -0.15%
Canola Jul 2014 474.30 -0.40 -0.08%
Canola Nov 2014 487.70 +1.30 +0.27%
Milling Wheat Mar 2014 192.00 -1.00 -0.52%
Milling Wheat May 2014 202.00 -1.00 -0.49%
Milling Wheat Jul 2014 206.00 -1.00 -0.48%
Durum Wheat Mar 2014 244.00 -1.00 -0.41%
Durum Wheat May 2014 248.00 -1.00 -0.40%
Durum Wheat Jul 2014 249.00 unch 0.00%
Barley Mar 2014 146.00 unch 0.00%
Barley May 2014 148.00 unch 0.00%
Barley Jul 2014 148.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jan 2014 1324 -22.5 -1.67%
Soybeans Mar 2014 1313.75 -21 -1.57%
Soybeans May 2014 1298.75 -18.5 -1.40%
Soybeans Jul 2014 1287 -16.25 -1.25%
Soybeans Aug 2014 1257.5 -12.25 -0.96%
Soybeans Sep 2014 1200.25 -9 -0.74%
Soybean Meal Jan 2014 441.2 -6.8 -1.52%
Soybean Meal Mar 2014 427.7 -8.9 -2.04%
Soybean Meal May 2014 417.3 -7.9 -1.86%
Soybean Oil Jan 2014 39.06 -0.25 -0.64%
Soybean Oil Mar 2014 39.38 -0.25 -0.63%
Soybean Oil May 2014 39.77 -0.26 -0.65%
Corn Mar 2014 425 -1.75 -0.41%
Corn May 2014 433.5 -1.75 -0.40%
Corn Jul 2014 440.5 -1.5 -0.34%
Corn Sep 2014 446.75 -1 -0.22%
Corn Dec 2014 453.75 -0.5 -0.11%
Oats Mar 2014 354.5 -0.25 -0.07%
Oats May 2014 334.75 +0.75 +0.22%
Oats Jul 2014 327.75 +0.25 +0.08%
Oats Sep 2014 320 -7.75 -2.36%
Oats Dec 2014 309 +1 +0.32%
Wheat Mar 2014 612.75 -7 -1.13%
Wheat May 2014 619.25 -6.75 -1.08%
Wheat Jul 2014 622.25 -5.25 -0.84%
Wheat Sep 2014 631.25 -5.25 -0.82%
Wheat Dec 2014 645 -5.25 -0.81%
Minneapolis
Spring Wheat Mar 2014 646.75 -3.25 -0.50%
Spring Wheat May 2014 657.25 -3 -0.45%
Spring Wheat Jul 2014 668.25 -3.75 -0.56%
Spring Wheat Sep 2014 676.75 -3.5 -0.51%
Spring Wheat Dec 2014 688.5 -4.75 -0.69%
Kansas City
KCBT Red Wheat Mar 2014 653.75 -6.75 -1.02%
KCBT Red Wheat May 2014 656.5 -7.25 -1.09%
KCBT Red Wheat Jul 2014 656.75 -6.25 -0.94%
KCBT Red Wheat Sep 2014 667 -6.25 -0.93%
KCBT Red Wheat Dec 2014 678.75 -6 -0.88%
Light crude oil nearby futures in New York rose 58 cents at $97.80 US per barrel.
The Canadian dollar at noon was 93.94 cents US, down from 94.25 cents the previous trading day. The U.S. dollar at noon was $1.0645 Cdn.
In unofficial tallies —
The Toronto Stock Exchange’s S&P/TSX composite index closed up 154.57 points, or 1.17 percent, at 13,334.73.
The Dow Jones industrial average rose 293.03 points or 1.85 percent, to end unofficially at 16,168.29, a record closing high.
The S&P 500 gained 29.65 points or 1.66 percent, to finish at 1,810.65, also a record closing high.
The Nasdaq Composite added 46.384 points or 1.15 percent, to close at 4,070.064.
