Grain markets rallied sharply Friday, reducing the week’s losses, as traders focused on strong U.S. exports and crude oil’s support for vegetable oil prices.
Nonetheless, it was a bad week for crop markets as worries grew over the violent revolution in Libya and the effect of $100 per barrel oil on world economic recovery.
March canola lost $10.90 per tonne on the week.
But Friday proved to be a day when some confidence returned.
Dictator Muammar Gaddafi was defiant despite reports of an increasing number of cities siding with the revolution. But fears about the situation were offset by Saudi Arabia increasing oil production to fill the gap.
U.S. corn and wheat weekly exports were strong, with buyers attracted by the lower prices.
Soybean oil led oilseeds higher. The U.S. Department of Agriculture forecast that the new biofuel mandate would push up biodiesel production. It forecast that by the end of 2011-12, U.S. soy oil stocks will fall to a seven year low of 2.073 billion pounds.
In Winnipeg, canola was also supported by slower farmer deliveries and renewed processor buying.
The gains were partly offset by the stronger Canadian dollar, which has rallied on the stronger crude oil prices.
The Canadian Oilseed Processors Association reported that members had crushed 119,135 tonnes in the week ending Feb. 23, an increase of 3.7 percent from the week before.
The Canadian Wheat Board will release its first Pool Return Outlook for 2011-12 on Monday.
Also in wheat news, the area suffering from severe drought in China continues to shrink. The overall drought area stands at 5.71 million hectares, of which 1.04 million are severe. That is down from 7.73 million in drought and 1.69 million severe on Feb. 9.
Winnipeg prices at the close:
Canola Mar 11 $575 per tonne up $9.60
Canola May 11 $583.40 up $9.20
Canola Jul 11 $591.10 up $9.20
Canola Nov 11 $573.00 up $12.70
The March contract 14-day Relative Strength Index was 44. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Mar 11 $194 unchanged
Western Barley May 11 $205 unchanged
There has been almost no trade the moribund western barley contract for months.
Chicago
Soybeans Mar 11 $13.655 US per bu. up 47.25 cents
Soybeans May 11 $13.75 up 45.75 cents
Corn Mar 11 $7.12 per bu. up 26.25 cents
Corn May 11 $7.22 up 25.5 cents
Oats Mar 11 $3.6925 per bu. up nine cents
Oats May 11 $3.79 up nine cents
Spring Wheat Mar 11 $9.1575 per bu. up 22 cents
Spring Wheat May 11 $9.285 up 22.75 cents
Spring Wheat Dec 11 $9.4775 up 24.5 cents
Light crude oil at New York rose 60 cents per barrel to 97.88. Earlier in the day, it climbed as high as $99.20 but did not top $100 as it had earlier in the week.
The Canadian dollar at noon was $1.0195 US, up from $1.0161 the previous trading day. The U.S. dollar at noon was 98.09 cents Cdn.
The Toronto Stock Exchange composite index rose 184.82 points to 14,052.13.
The Standard & Poor’s 500 Index gained 13.78 points at 1,319.88.
For the week, the TSX composite fell 0.5 percent, S&P 500 fell 1.7 percent the Dow lost 2.1 percent and the Nasdaq fell 1.9 percent.
