Weather, weak loonie push canola higher

Canola jumped higher on Friday on the strength of weather problems, a weaker loonie and support from U.S. soybean futures.Parts of Saskatchewan again were hit with heavy rain in the last few days, including a storm that hit the Yorkton area on Thursday night causing flooding in the city. But the Peace River region is suffering from dry soil.The Saskatchewan crop report said 27 percent of the canola crop in the province is in poor or very poor condition.Canola was also supported by a falling Canadian dollar. A weak loonie improves crushers’ profit margins and supports exports.Nearby soybeans rose Thursday and Friday on the tight stocks revealed in Wednesday’s United States Department of Agriculture report and on strong weekly exports. But corn settled back on Friday on profit taking after two days of strong grains. U.S. markets will be closed Monday for Independence Day.Western Europe is enduring a heat wave that could shave yield from crops.Crop futures got no help from other markets such as equities and crude oil. They suffered from signs, including weak housing sales and manufacturing activity, that the United States economic recovery is stalled. The number of Americans working in June fell. While the unemployment rate fell to 9.5 percent from 9.7 in May, that was because a flood of jobless workers gave up their employment search.With many traders taking an extra long weekend off, there was little activity in the Winnipeg market.July canola rose $9 per tonne Friday to $432.80 on no trade. The July contract has moved into delivery mode and expires July 14.Over the week, canola fell $4.80 per tonne.The previous day’s best basis narrowed to $10 per tonne off the July contract in the par region, according to the Winnipeg ICE Futures daily report.New crop November canola, the most traded contract, rose $5 per tonne to $421.80 on 4,827 trades. Over the week, November rose $2.The 14-day Relative Strength Index for July canola was 70, according to BarChart.com. November’s RSI was 66. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates over bought.The Canadian dollar at noon was 93.91 cents US, down from 94.29 cents at noon the previous trading day. The U.S. dollar at noon was $1.0649.Winnipeg barley was untraded and unchanged with July at $166 October at $152.50 and December at $152.50.Chicago July soybeans rose 9.25 cents to $9.6275 US per bushel and new-crop November rose 0.25 cents to $9.0575.July oats rose 1.5 cents to $2.43 per bu. December oats were unchanged at $2.51 per bu. Oats jumped higher on June 30 but gave it all back on July 1.In New York, crude oil for August delivery fell 81 cents to $72.14 per barrel.The Canadian Oilseed processors Association did not have a report.The Saskatchewan Agriculture crop report said 56 percent of the province’s fall-seeded cereals are at a normal stage of development, but 72 percent of the spring-seeded cereals, 75 percent of the oilseeds and 63 percent of the pulses are behind normal development. A week of sunny and windy weather helped to dry some areas and improve crop conditions. Ninety-one percent of winter wheat and 86 percent of fall rye are in good to excellent condition.Good to fair condition ratings were given to 82 percent of spring wheat, 85 percent of durum, 76 percent of barley, 79 percent of oats, 73 percent of flax, 73 percent of canola, 91 percent of mustard, 85 percent of lentils, 84 percent of peas, 80 percent of canaryseed and 98 percent of chickpeas.

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