All crop futures gained on Thursday as worries about European drought, delayed North American seeding and dryness in China raised traders’ concerns.
July canola rose $8.60 to $592.10 per tonne. Rising European rapeseed prices helped support canola.
Spring wheat in Minneapolis posted strong gains again as the market becomes increasingly worried about delayed seeding in Canada and North Dakota. In the Sunday through Tuesday period much of North Dakota and southern Manitoba is forecast to get more than 20 millimetres of rain.
Minneapolis wheat is the highest it has been since the summer of 2008.
Saskatchewan Agriculture said today that 54 percent of that province’s crop was in the ground, behind the five year average of 72 percent. Northern areas are making good progress but only 24 percent was seeded in the southeast and 43 percent seeded in the east central region.
As of May 22, only 34 percent of North Dakota’s spring wheat had been seeded, down from the normal pace of 85 percent.
The International Grains Council today lowered its forecast for world wheat production by five million tonnes from its report last month.
Global production will reach 667.3 million tonnes in 2011-12, up from 649.1 million tonnes in 2010-11. However, it sees consumption at 669 million tonnes, meaning year end stocks will decline slightly.
A French analyst says soft wheat production in that country will be down 10 percent from last year due to drought.
The U.K. has lost as much as 20 percent of its crops to dry weather, said Allan Wilkinson, head of agriculture for HSBC Bank this week.
French analysts Offre & Demande Agricole expects Ukraine to harvest 1.95 million tonnes of rapeseed in 2011, up from 1.47 million last year. That would allow exports to Europe of about 1.8 million tonnes.
Analysts already expect the EU to import 2.5 million tonnes of rapeseed in 2010-11 and that number might rise as drought cuts EU production.
Drought in China has now moved south to the rice area around the Yangtze River region. The Chinese government says the earlier drought in the wheat area did not hurt production. Rice is irrigated, but many sources of surface water have dried up. The government is releasing more water from the Three Gorges Dam to lift Yangtze flow and provide irrigation water.
Winnipeg (per tonne)
Canola Jul 11 $592.10, up $8.60
Canola Nov 11 $593.60, up $7.10
Canola Jan 12 $599.90, up $6.50
Canola Mar 12 $603.50, up $7.00
The previous day’s best basis was $18 under the July contract according to ICE Futures Canada in Winnipeg.
The July contract’s 14-day Relative Strength Index was 62. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Jul 11 $205, unchanged
Chicago (per bushel)
Soybeans Jul 11 $13.8475, up 7.75 cents
Soybeans Aug 11 $13.81, up 8.0
Soybeans Nov 11 $13.725, up 11.5
Corn Jul 11 $7.455, up 3.25
Corn Dec 11 $6.7625, up 5.5
Oats Jul 11 $3.78, up 9.0
Oats Dec 11 $3.93, up 7.5
Minneapolis (per tonne)
Spring Wheat Jul 11 $10.4575, up 25.75 cents
Spring Wheat Sep 11 $10.22, up 17.25
Spring Wheat Dec 11 $10.2575, up 17.0
Light crude oil nearby futures in New York fell $1.09 to $100.23 US per barrel.
The Canadian dollar at noon was $1.0195 US, down from $1.0241 the previous trading day. The U.S. dollar at noon was 98.09 cents Cdn.
The Toronto Stock Exchange composite index closed up 24.43 points, or 0.18 percent at 13,775.90.
The Standard and Poor’s 500 index closed up 5.22 points, or 0.40 percent, to 1,325.69.
