Nervousness about Wednesday’s Statistics Canada report and weaker soy oil pressured canola lower Tuesday, but wheat rose on threat to U.S. winter wheat.
The Canadian loonie continued to fall, limiting the loss in canola. The Bank of Canada meets Wednesday but no change in policy is expected. Last month the bank stopped talking about interest rate increases. That, coupled with weak commodity prices, has weighed down the loonie.
Many traders believe Canada’s canola crop is around 17 million tonnes, well above StatsCan’s September forecast of about 16 million tonnes. A few believe the crop could be as large as 18 million tonnes.
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I can’t imagine that farmers in the survey told the agency they have 18 million tonnes so I seriously doubt there will be a major negative surprise.
It is more likely that the crop size will be adjusted up next year once exports, domestic use and year end stocks are tallied. Watch my twitter feed #darcemcmillan and #westernproducer as well as Producer.com for our coverage of the Statistics Canada report Wednesday.
The latest official crop forecast from Australia increased the canola crop estimate to 3.41 million tonnes from 3.31 million. A few weeks also there was concern about Australian crops because of late season frost, but apparently the damage was light.
January canola closed at $482.40, down $4.90.
Wheat rose despite a surprise increase in Australia’s official wheat forecast, which climbed to 26.2 million tonnes, up seven percent from the last forecast. An excellent crop in Western Australia offset problems in eastern states.
The wheat market is nervous over the cold blast that will hit the southern U.S. plains this week, potentially damaging winter wheat where it is not protected by snow. Reuters reported that Don Keeney, meteorologist for MDA Weather Services said five percent of the crop is at risk of winterkill.
Also, wheat was supported by news that several North African countries have tendered for wheat, leading to hopes for increased exports.
With wheat’s support corn futures edged higher. However, news that China’s quarantine officials have rejected some cargoes of corn because they contained unapproved GM material has the corn market on edge. There is speculation that the problem could halt imports from America for some months. There is talk that with a large supply at home Chinese buyers are looking for ways to not take cargoes they previously bought.
Prospects for big crops in South America also weighed on grain and oilseed markets generally.
Today Informa Economics raised its forecast for Brazil’s soybean crop to 88 million tonnes from its previous estimate of 86.7 million. It lowered the outlook for the country’s corn crop to 70.6 million tonnes from 71.1 million
Informa’s Argentina’s corn crop estimate was unchanged at 25 million tonnes and the soybean crop at 59.5 million.
It raised Ukraine’s corn crop estimate to 28.5 million tonnes from 27.5 million.
While the supply side of the ledger is bearish for soybeans, the demand side is bullish. Oil World today noted China’s imports in the September to November period were 28.4 million tonnes, up from 23.9 million last year in the same time frame, Bloomberg reported.
Oil World said China appears to want stocks on hand next year in case there is a repeat in Brazil of the logistics tie up that sharply limited its exports immediately after its harvest, Bloomberg reported.
Oil World thinks China will import 69.7 million tonnes of soybeans in 2013-14, up from 59.9 million last year.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2014 482.40 -4.90 -1.01%
Canola Mar 2014 492.30 -4.90 -0.99%
Canola May 2014 501.40 -4.30 -0.85%
Canola Jul 2014 508.70 -3.30 -0.64%
Canola Nov 2014 516.90 -1.30 -0.25%
Milling Wheat Dec 2013 212.00 +1.00 +0.47%
Milling Wheat Mar 2014 223.00 +1.00 +0.45%
Milling Wheat May 2014 235.00 +1.00 +0.43%
Durum Wheat Dec 2013 247.00 unch 0.00%
Durum Wheat Mar 2014 253.00 unch 0.00%
Durum Wheat May 2014 257.00 unch 0.00%
Barley Dec 2013 152.00 unch 0.00%
Barley Mar 2014 154.00 unch 0.00%
Barley May 2014 155.00 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 1319.75 -1.5 -0.11%
Soybeans Mar 2014 1304.5 -1.5 -0.11%
Soybeans May 2014 1287.25 -0.25 -0.02%
Soybeans Jul 2014 1279.75 +1 +0.08%
Soybeans Aug 2014 1253 +1.5 +0.12%
Soybeans Sep 2014 1196.5 +4.25 +0.36%
Soybean Meal Dec 2013 446.1 -0.9 -0.20%
Soybean Meal Jan 2014 428.8 unch 0.00%
Soybean Meal Mar 2014 419.8 +1.8 +0.43%
Soybean Oil Dec 2013 39.9 -0.44 -1.09%
Soybean Oil Jan 2014 40.11 -0.49 -1.21%
Soybean Oil Mar 2014 40.51 -0.49 -1.20%
Corn Dec 2013 422 +5.5 +1.32%
Corn Mar 2014 431.25 +6.75 +1.59%
Corn May 2014 439.5 +6.5 +1.50%
Corn Jul 2014 446.75 +6.75 +1.53%
Corn Sep 2014 452.25 +6 +1.34%
Oats Dec 2013 367.5 +8 +2.23%
Oats Mar 2014 329.5 +5 +1.54%
Oats May 2014 318.5 +3.5 +1.11%
Oats Jul 2014 315.5 +2.75 +0.88%
Oats Sep 2014 322 +2.75 +0.86%
Wheat Dec 2013 653.75 +4 +0.62%
Wheat Mar 2014 668.25 +6.5 +0.98%
Wheat May 2014 672.25 +5.75 +0.86%
Wheat Jul 2014 668.25 +4.75 +0.72%
Wheat Sep 2014 675.25 +4.25 +0.63%
Minneapolis
Spring Wheat Dec 2013 684.75 +3.5 +0.51%
Spring Wheat Mar 2014 704.5 +2 +0.28%
Spring Wheat May 2014 711 +2 +0.28%
Spring Wheat Jul 2014 717 +1.5 +0.21%
Spring Wheat Sep 2014 720.5 +1 +0.14%
Kansas City
KCBT Red Wheat Dec 2013 711.75 +6.75 +0.96%
KCBT Red Wheat Mar 2014 711.5 +5.75 +0.81%
KCBT Red Wheat May 2014 709.5 +5 +0.71%
KCBT Red Wheat Jul 2014 700 +2.25 +0.32%
KCBT Red Wheat Sep 2014 707 +2.5 +0.35%
Light crude oil nearby futures in New York rose $2.22 at $96.04 US per barrel.
The Canadian dollar at noon was 93.79 cents US, down from 94.04 cents the previous trading day. The U.S. dollar at noon was $1.0662 Cdn.
Weak results at Bank of Montreal pressured the TSX composite and U.S. stocks were down on signs of a slow start to Christmas shopping season. There is also some profit taking after a strong run up in stock prices this year.
The Toronto Stock Exchange’s S&P/TSX composite index closed down 99.70 points, or 0.74 percent, at 13,319.87, after touching 13,279.08, its lowest since Oct. 24.
The Dow Jones industrial average fell 94.15 points, or 0.59 percent, to end at 15,914.62.
The Standard & Poor’s 500 Index declined 5.75 points, or 0.32 percent, to finish at 1,795.15.
The Nasdaq Composite Index dropped 8.06 points, or 0.20 percent, to close at 4,037.20.
