Canola futures fell on Friday along with soybeans on profit taking after recent gains and on a USDA report that was a little bearish regarding oilseeds.
The fall in canola was partly offset by a weaker loonie that fell below par on Canadian job losses in January.
March canola still posted a strong gain on the week, as very tight old crop stocks kept the focus on demand rationing, although Thursday’s sharp gains might have been overdone.
New crop November fell on the week.
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On the day, March canola closed at $636.90, down $10.50.
November closed at $555.70, down $4.20.
Over the week March rose $12.40 while November fell $5.70.
USDA report
USDA said domestic corn ending stocks were 632 million bushels. The midpoint of the pre-report trade estimate was 618 million bu. USDA did not cut the amount of corn fed to livestock or used to make ethanol
U.S. soybean ending stocks were 125 million bu., very close to the pre-report trade estimate of 129 million bu.
• USDA increased its Brazil soybean crop forecast by one million tonnes to 83.5 million. The trade estimate was 82.645 million tonnes. Brazil’s corn crop was pegged at 72.5 million tonnes. The trade estimate was 71.283 million.
• USDA dropped Argentina’s soybean crop estimate by one million tonnes to 53 million. The trade estimate was about 53.1 million. USDA put the corn crop at 27 million tonnes. The trade estimate was 26.261 million.
The Brazilian soy crop increase contributed to an increase in world ending stocks to 60 million tonnes, up from 59.46 million last month. It was a pretty minor change but it seemed to be all that was needed to take the wind out of the sails of the oilseed market.
• Argentina’s government on Friday said crops are in urgent need of rain.
Buenos Aires Grains Exchange yesterday forecast the soy crop at 50 million tonnes, so expect more downgrades in the USDA number in coming months.
• U.S. wheat ending stocks were 691 million bu. The pre-report trade estimate was 727 million bu. The decline was based on higher than expected feeding of wheat to livestock.
• The Canadian Oilseed Processors Association said members crushed 121,955 tonnes of canola in the week ending Feb. 6, an increase of 5.7 percent.
The CME plans to reverse its stand on longer crop trading hours.
Last May it extended them but big traders like Cargill and Louis Dreyfus don’t like it. Volume is light at night but they have to staff trade desks. There is risk of big moves during the lightly traded hours.
Smaller grain companies, often with just one or a few elevators, say they like it because it allows them to hedge the grain they buy whenever they buy it.
CME says it continues to talk to customers about the best compromise.
Winnipeg ICE Futures Canada (per tonne)
Canola Mar 13 $636.90, down $10.50 -1.62%
Canola May 13 $620.70, down $6.80 -1.08%
Canola Jul 13 $605.90, down $6.20 -1.01%
Canola Nov 13 $555.70, down $4.20 -0.75%
Milling Wheat Mar 13 $291.00, unchanged
Milling Wheat May 13 $294.00, unchanged
Milling Wheat Jul 13 $296.00, unchanged
Milling Wheat Oct 13 $296.00, unchanged
Durum Wheat Mar 13 $309.20, down $3.20 -1.02%
Durum Wheat May 13 $313.20, down $3.20 -1.01%
Durum Wheat Jul 13 $316.20, down $3.20 -1.00%
Durum Wheat Oct 13 $301.50, down $3.20 -1.05%
Barley Mar 13 $241.50, unchanged
Barley May 13 $242.50, unchanged
Barley Jul 13 $243.00, unchanged
Barley Oct 13 $243.00, unchanged
Chicago (per bushel)
Soybeans (P) Mar 13 $14.525, down 34.25 cents -2.30%
Soybeans (P) May 13 $14.3675, down 36.5 -2.48%
Soybeans (P) Jul 13 $14.255, down 36.75 -2.51%
Soybeans (P) Aug 13 $13.8875, down 42.75 -2.99%
Soybeans (P) Sep 13 $13.295, down 44.75 -3.26%
Soybeans (P) Nov 13 $12.82, down 42.0 -3.17%
Corn (P) Mar 13 $7.09, down 1.75 -0.25%
Corn (P) May 13 $7.0875, down 3.25 -0.46%
Corn (P) Jul 13 $6.99, down 2.75 -0.39%
Corn (P) Sep 13 $5.8475, down 4.5 -0.76%
Corn (P) Dec 13 $5.6325, down 3.25 -0.57%
Oats (P) Mar 13 $3.8575, up 4.25 +1.11%
Oats (P) May 13 $3.7625, up 4.5 +1.21%
Oats (P) Jul 13 $3.7425, up 4.5 +1.22%
Oats (P) Sep 13 $3.735, up 4.5 +1.22%
Oats (P) Dec 13 $3.70, down 1.0 -0.27%
Minneapolis (per bushel)
Spring Wheat Mar 13 $8.3625, down 3.0 cents -0.36%
Spring Wheat May 13 $8.4925, down 2.25 -0.26%
Spring Wheat Jul 13 $8.585, down 2.0 -0.23%
Spring Wheat Sep 13 $8.605, down 2.5 -0.29%
Spring Wheat Dec 13 $8.66, down 1.5 -0.17%
The Bank of Canada noon rate for the loonie was 99.80 cents US, down from $1.0007 on Thursday.
The U.S. buck was $1.002 Cdn.
The loonie fell due to weak Canadian economic reports that indicate no reason for the Bank of Canada to increase interest rates any time soon.
Canada lost 21,900 jobs in January. Analysts expected a gain of about 5,000.
But a drop in the number of people seeking work pushed the unemployment rate down to a four-year low of seven percent.
Canadian housing starts fell steeply in January to 160,577 units from 197,118 in December.
Internationally, economic reports were more upbeat.
China’s trade activity and new lending jumped last month indicating a recovery there.
In the U.S., rising exports and less imported oil helped push the trade deficit to its narrowest point in nearly three years in December. That increased hope that the fourth quarter GDP might be better than expected.
In early tallies —
The Toronto Stock Exchange’s S&P/TSX composite index rose 45.31 points, or 0.36 percent, to close at 12,801.23.
The Dow Jones industrial average ended up 48.92 points, or 0.35 percent, at 13,992.97.
The Standard & Poor’s 500 Index rose 8.53 points, or 0.57 percent, to 1,517.92.
The Nasdaq Composite Index climbed 28.74 points, or 0.91 percent, to 3,193.87.
For the week, he TSX was up 0.3 percent, the Dow was down 0.1 percent, the S&P 500 rose 0.3 percent and the Nasdaq was up 0.5 percent.
