Technical weakness and disappointing weekly export sales hammered soybean futures down 2.5 percent Friday, which also dragged down canola.
The U.S. Agriculture Department said on Friday morning that weekly export sales of soybeans were 848,500 tonnes, lower than the range of market forecasts for 900,000 to 1.2 million tonnes. Soy oil exports were also disappointing.
The cash soybean market is also under pressure because of heavier American farmer deliveries. The U.S. handling and transportation system is now about as congested as Canada’s as harvest of the record crop winds down.
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Crop futures were also under pressure as the prospects for South American soybean and corn production are improving with rain in Argentina helping to erase the moisture deficit there. The U.S. soybean acreage is also expected to be record large in 2014.
Of course the record large canola crop in Canada also weighs on the futures price.
Limiting losses, the U.S. oilseed processors association said the October soybean crush was stronger than analysts expected.
January canola closed at $488.90 down $9.10. March closed at $497.40, down $8.70.
The loss Friday wiped out almost all the gains canola made early in the week. On the week, January canola rose just 80 cents.
Late in the trading day, the U.S. Environmental Protection Agency said it proposed slashing the ethanol mandate for 2014 to 15.21 million gallons, down 16 percent from the previous target.
Reuters reported that the plan follows the agency’s warnings that the country was approaching a point when the Renewable Fuel Standard would require the use of more ethanol than can be blended into gasoline at the 10 percent level that dominates the U.S. fueling infrastructure.
Refiners have said this impending “blend wall,” if left in place, would force them to export more fuel or produce less gasoline, leading to shortages and higher prices at the pump, Reuters reported.
If approved, the cut has the potential of reducing demand for U.S. corn, which would have a negative effect on corn prices.
The Canadian Oilseed Processors Association said members crushed 151,516 tonnes of canola in the week ending Nov. 13, up one percent from the previous week. That represented a capacity use of about 87 percent.
Reuters markets columnist Gavin Maguire today wrote that the falling U.S. corn prices are looking like an ever better deal to Chinese buyers. The gap between China’s interior corn price (even with a record Chinese crop) and U.S. imported corn is starting to look good for more imports. However, more imports would require Chinese authorities to issue new import licences.
Importing more corn goes against the country’s self sufficiency policy, but the savings might be too good to pass up, Maguire suggested.
Wheat futures fell today on disappointing weekly U.S. export sales. Chicago wheat was down 0.9 percent on the week, its fourth consecutive weekly fall.
Private analytical firm Informa Economics pegged 2014 U.S. wheat plantings at 58.105 million acres, up from its previous outlook of 57.7 million, trade sources told Reuters.
ICE Futures Canada, dollars per tonne
Canola Jan 2014 488.90 -9.10 -1.83%
Canola Mar 2014 497.40 -8.70 -1.72%
Canola May 2014 505.20 -8.30 -1.62%
Canola Jul 2014 510.90 -8.30 -1.60%
Canola Nov 2014 514.90 -7.90 -1.51%
Milling Wheat Dec 2013 216.00 -1.00 -0.46%
Milling Wheat Mar 2014 227.00 -1.00 -0.44%
Milling Wheat May 2014 235.00 -1.00 -0.42%
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 1280.5 -33 -2.51%
Soybeans Mar 2014 1265.75 -31.75 -2.45%
Soybeans May 2014 1250.25 -30 -2.34%
Soybeans Jul 2014 1245 -30.75 -2.41%
Soybeans Aug 2014 1228.5 -28 -2.23%
Soybeans Sep 2014 1185.5 -24 -1.98%
Soybean Meal Dec 2013 410.5 -14.1 -3.32%
Soybean Meal Jan 2014 405.7 -13.2 -3.15%
Soybean Meal Mar 2014 396.5 -12.5 -3.06%
Soybean Oil Dec 2013 40.47 -0.5 -1.22%
Soybean Oil Jan 2014 40.74 -0.5 -1.21%
Soybean Oil Mar 2014 41.12 -0.51 -1.23%
Corn Dec 2013 422 -4.5 -1.06%
Corn Mar 2014 430.5 -6 -1.37%
Corn May 2014 438.5 -6.5 -1.46%
Corn Jul 2014 445.75 -6.5 -1.44%
Corn Sep 2014 451.75 -6.5 -1.42%
Oats Dec 2013 343 +2.75 +0.81%
Oats Mar 2014 323.25 +1.5 +0.47%
Oats May 2014 311.25 -0.25 -0.08%
Oats Jul 2014 307 -2.5 -0.81%
Oats Sep 2014 307.5 -2.5 -0.81%
Wheat Dec 2013 644.5 -0.25 -0.04%
Wheat Mar 2014 654.5 -0.75 -0.11%
Wheat May 2014 658.5 -1 -0.15%
Wheat Jul 2014 655.75 -3.5 -0.53%
Wheat Sep 2014 664 -3.5 -0.52%
Minneapolis
Spring Wheat Dec 2013 696.75 -3.25 -0.46%
Spring Wheat Mar 2014 706.5 -3.5 -0.49%
Spring Wheat May 2014 714.5 -2.75 -0.38%
Spring Wheat Jul 2014 721.25 -1.75 -0.24%
Spring Wheat Sep 2014 725.25 -2 -0.28%
Kansas City
KCBT Red Wheat Dec 2013 689.75 -2.25 -0.33%
KCBT Red Wheat Mar 2014 696 -2.75 -0.39%
KCBT Red Wheat May 2014 698.5 -3.25 -0.46%
KCBT Red Wheat Jul 2014 686.75 -4.5 -0.65%
KCBT Red Wheat Sep 2014 696.75 -5.5 -0.78%
Light crude oil nearby futures in New York rose eight cents at $93.84 US per barrel.
The Bank of Canada noon rate for the loonie was 95.62 cents US, up from 96.27 cents the previous trading day. The U.S. dollar at noon was $1.0458 Cdn.
Late in the afternoon North American stock exchanges had posted strong gains.
On Thursday the U.S. Federal Reserve’s vice chair Janet Yellen, who is expected to take over as head of the U.S. central bank, appeared before law makers and said she supported the Fed’s stimulus program until it was clear the U.S. economy is growing enough to strongly improve the unemployment situation.
The easy money and low interest rates generated by the stimulative program cause investors to look for better yields in the stock market.
In unoffical tallies —
The Toronto Stock Exchange’s S&P/TSX composite index closed up 51.19 points, or 0.38 percent, at 13,482.57, after reaching 13,490.19, its highest since July 2011.
The Dow Jones industrial average was up 85.93 points, or 0.54 percent, at 15,962.15.
The Standard & Poor’s 500 Index was up 7.56 points, or 0.42 percent, at 1,798.18.
The Nasdaq Composite Index was up 13.23 points, or 0.33 percent, at 3,985.97.
On the Week the TSX composite rose 0.8 percent.
