Canola futures on Wednesday were hurt by the sharply higher Canadian dollar and by generally weaker oilseed values this week caused by growing estimates of South American soybean production.
All the talk a couple of weeks ago about heavy rain hurting Brazil’s soybean harvest may have been overblown. Brazil’s government today estimated the crop at a record 72.2 million tonnes, up sharply from a forecast of 70.3 million tonnes in March.
The rain might have damaged quality, but not quantity. The government forecast record average yield and increased the estimate of the number of acres that were seeded.
New crop canola fell less than old crop months, with the new crop supported by worries over the flood threat and late seeding.
The loonie rose on strong oil, gold and commodity prices and the relative strength of the Canadian economy. It was also helped by U.S. dollar weakness, caused by expectations that the European Central Bank will raise interest rates this week.
Corn dipped a little after hitting record highs in recent days, but remains well supported. The USDA will have a new estimate for year end crop stocks on Friday.
The U.S. Grains Council said this week that China may import an additional 2 to 3 million tonnes of corn by September. Also, Argentina said this week it is working on a health and safety protocol with China that could open the door to several million tonnes of exports to the Asian giant.
Wheat was pressured by a change in weather forecasts that raised the potential for showers in the hard red winter wheat area.
Winnipeg (per tonne)
Canola May 11 $587.30, down $5.90
Canola Jul 11 $596.10, down $5.70
Canola Nov 11 $580.40, down $2.10
Canola Jan 12 $586.40, down $2.00
The previous day’s best basis narrowed to $17.03 under the May contract according to ICE Futures Canada in Winnipeg.
The May contract’s Relative Strength Index was 53. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley May 11 $200.00s unchanged
Chicago (per bushel)
Soybeans May 11 $13.765, up 3.25 cents
Soybeans Jul 11 $13.8825, up 3.5 cents
Soybeans Nov 11 $13.7625, down 2.5 cents
Corn May 11 $7.63, down 3.75 cents
Corn Dec 11 $6.475, up 0.75 cents
Oats May 11 $3.92, up 0.5 cents
Oats Jul 11 $4.005, up 1.5 cents
Minneapolis (per bushel)
Spring Wheat May 11 $9.545 down 7.75 cents
Spring Wheat Jul 11 $9.63, down 7.75 cents
Spring Wheat Dec 11 $9.7625, down 5.5 cents
Light crude oil nearby futures in New York rose 49 cents to $108.83 US per barrel.
The Canadian dollar at noon was $1.0430 US, up from $1.0378 the previous trading day. The U.S. dollar at noon was 95.88 cents Cdn.
The Toronto Stock Exchange composite index fell 67.88 points, or 0.48 percent, to 14,202.65.
The Standard & Poor’s 500 index rose 2.91 points, or 0.22 percent, to 1,335.54.
