Confirmation of tight canola stocks and rising soy oil futures helped lift canola futures on Friday.
July canola settled at $525.80, up $3 and November closed at $504.80, up $2.90.
March 31 canola stocks came in a 6.6 million tonnes, compared the mid point of the pre-report Reuters analysts’ poll of 6.7 million tonnes.
Soyoil rose after the U.S. International Trade Commission voted on Friday to continue a U.S. Commerce Department investigation into alleged dumping and unfair subsidies of biodiesel fuels from Argentina and Indonesia, moving a step closer to punitive U.S. duties.
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Summer-like weather across the Canadian Prairies is helping to advance seeding, which to this point is well behind the normal pace.
A system moving across the Prairies Sunday and Monday is expected to deliver light rain in many areas.
Over the week, the July canola contract rose $11.10 or 2.16 percent and the November contract climbed $5.40 or 1.1 percent.
The Canadian dollar gained about a half cent today.
U.S. GRAINS
Soybeans ended the day little changed, but corn rose about one percent.
Kansas and Minneapolis wheats rose more than one percent and Chicago soft wheat followed behind, gaining a little less than one percent.
Markets are not sure what to make of the U.S. hard red winter wheat crop. A significant portion of the crop was buried by a snow storm last weekend, but scouts on a tour during the week found that yield potential was still above average. However they were unable to determine the condition of the crop that was still buried under the snow in the western part of Kansas so the production estimate is more tentative than normal.
Markets are also uncertain what to make of the heavy rains and flooding in the southern parts of Missouri and Illinois.
Some seeded fields will have to be reseeded and generally planting will be delayed until the ground dries enough to support machinery.
July soybeans rose 1.75 percent since last Friday. November climbed 1.4 percent.
July corn rose 1.2 perent over the week. July Minneapolis spring wheat barely changed on the week.
FRANCE
“The weather risk remains in France although the rain this week has brought some relief to crops,” a futures trader told Reuters.
The condition of French wheat declined for a fourth consecutive week, with 74 percent of crops rated good or excellent as of May 1 against 78 percent a week earlier, farm office FranceAgriMer said on Friday.
Dry weather since winter plus frost in late April have created concern about crop stress, although rain and milder temperatures have returned to much of France this week.
Markets will be watching this weekend’s run off presidential vote between centrist candidate Emmanuel Macron and his far-right rival Marine Le Pen. Macron is leading in the opinion polls.
CANOLA CRUSH
Domestic canola crush sagged this past week with only 146,610 tonnes processed, down 19.4 percent from the week before. That was 68.6 percent of capacity, down from the average for the crop year of almost 90 percent.
EXPORTS
While the crush was down, exports rebounded strongly from the previous week. Canola shipments totalled 328,100 tonnes in week 39 of the crop year, up from 175,800 the week before.
The total to date is 8.342 million tonnes, up from 7.652 million last year at the same point.
WHAT DOES THE REPORT SIGNAL ABOUT FUTURE USE?
With the March 31 canola stocks at 6.6 million, you could have combined exports and domestic use of 1.5 million tonnes a month in the remaining four months of the crop year and have a tight 600,000 tonnes left as the carry over.
Agriculture Canada currently forcasts 1.1 million tonnes of carrover. If that is correct then you could have combined exports and domestic use of 1.375 million tonnes per month for the four remaining months.
In March, the combined exports and domestic use, roughly calculated, was 1.8 million.
The same rough calculation puts the combined exports and domestic use in February at 1.3 million.
WHAT WAS THE SIZE OF THE 2016 CROP?
Statistcs Canada in its November production report pegged the 2016 canola crop at 18.42 million tonnes and total supply (including carry in) at 20.539 million tonnes.
With the March 31 stocks report we can do a little ground truthing of these numbers.
We do this by adding what has been exported to the end of March this crop year, the amount of domestic use by crushers and the remaining stocks as set out in today’s report.
Exports were 7.45 million, domestic use was about 6.2 million and the March 31 stocks were 6.6 million.
Add those together and you get 20.25 million tonnes. If you add in “feed, waste and dockage”, which Agriculture Canada estimates at 388,000, and you get pretty close to the 20.539 million total supply in the department’s supply and demand table.
OUTSIDE MARKETS
Light crude oil nearby futures in New York were up 70 cents to US$46.22 per barrel. Sentiment remains bearish on oil because the production cuts by OPEC and Russia are not stopping the rise in crude oil stocks.
In the afternoon, the Canadian dollar was trading around US73.21 cents, up from 72.66 cents the previous trading day. The U.S. dollar was C$1.3659.
The U.S. added a higher than expected 211,000 jobs in April and the unemployment rate fell to 4.4 percent. This raises the expectation that the U.S. Federal Reserve will raise interest rates in June.
Canada’s economy added only 3,200 jobs, shy of forecasts for 10,000.
However the unemployment rate fell to 6.5 percent as the participation rate dipped.
Analysts noted that job growth has averaged 22,000 a month over the past six months and warned against reading too much into one month’s results.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 185.34 points, or 1.2 percent, at 15,582.04.
The Dow Jones Industrial Average rose 55.47 points, or 0.26 percent, to 21,006.94, the S&P 500 gained 9.77 points, or 0.41 percent, to 2,399.29, a record high, and the Nasdaq Composite added 25.42 points, or 0.42 percent, to 6,100.76.
For the week, the TSX composite was almost unchanged, the Dow edged up 0.3 percent, the Nasdaq rose 0.9 percent and the S&P 500 climbed 0.6 percent.
Winnipeg ICE Futures Canada dollars per tonne
Canola May 17 526.00s +3.00 +0.57%
Canola Jul 17 525.80 +3.00 +0.57%
Canola Nov 17 504.80 +2.90 +0.58%
Canola Jan 18 509.60 +3.40 +0.67%
Canola Mar 18 514.10 +3.70 +0.72%
Milling Wheat May 17 244.00 +3.00 +1.24%
Milling Wheat Jul 17 245.00 +3.00 +1.24%
Milling Wheat Oct 17 245.00 +2.00 +0.82%
Durum Wheat May 17 273.00 unch unch
Durum Wheat Jul 17 273.00 unch unch
Durum Wheat Oct 17 266.00 unch unch
Barley May 17 137.00 unch unch
Barley Jul 17 138.00 unch unch
Barley Oct 17 140.00 unch unch
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans May 2017 963.00 -2.25 -0.23%
Soybeans Jul 2017 973.00 -1.25 -0.13%
Soybeans Aug 2017 973.75 -0.25 -0.03%
Soybeans Sep 2017 968.50 +1.00 +0.10%
Soybeans Nov 2017 966.50 +1.75 +0.18%
Soybeans Jan 2018 973.25 +1.50 +0.15%
Soybean Meal May 2017 312.30 -1.80 -0.57%
Soybean Meal Jul 2017 316.90 -1.70 -0.53%
Soybean Meal Aug 2017 317.60 -1.50 -0.47%
Soybean Oil May 2017 32.71 +0.38 +1.18%
Soybean Oil Jul 2017 32.90 +0.40 +1.23%
Soybean Oil Aug 2017 32.99 +0.40 +1.23%
Corn May 2017 361.75 +3.75 +1.05%
Corn Jul 2017 370.75 +4.25 +1.16%
Corn Sep 2017 378.25 +4.25 +1.14%
Corn Dec 2017 388.50 +4.00 +1.04%
Corn Mar 2018 398.00 +3.75 +0.95%
Oats May 2017 254.00 +4.75 +1.91%
Oats Jul 2017 248.75 +4.75 +1.95%
Oats Sep 2017 229.00 +1.50 +0.66%
Oats Dec 2017 224.25 +4.75 +2.16%
Oats Mar 2018 227.75 +4.75 +2.13%
Wheat May 2017 427.50 +1.50 +0.35%
Wheat Jul 2017 442.25 +4.50 +1.03%
Wheat Sep 2017 456.25 +4.00 +0.88%
Wheat Dec 2017 476.25 +3.25 +0.69%
Wheat Mar 2018 493.25 +3.00 +0.61%
Minneapolis
Spring Wheat May 2017 542.00 +7.00 +1.31%
Spring Wheat Jul 2017 554.25 +6.75 +1.23%
Spring Wheat Sep 2017 561.25 +7.75 +1.40%
Spring Wheat Dec 2017 568.50 +7.00 +1.25%
Spring Wheat Mar 2018 576.25 +7.25 +1.27%
Kansas City
Hard Red Wheat May 2017 438.00 +5.50 +1.27%
Hard Red Wheat Jul 2017 450.00 +5.50 +1.24%
Hard Red Wheat Sep 2017 466.75 +5.75 +1.25%
Hard Red Wheat Dec 2017 490.75 +5.75 +1.19%
Hard Red Wheat Mar 2018 504.25 +5.75 +1.15%
Chicago livestock futures in US¢/pound (rounded to two decimal places)
Live Cattle (P) Jun 2017 128.30 -3.00 -2.28%
Live Cattle (P) Aug 2017 121.18 -2.99 -2.41%
Live Cattle (P) Oct 2017 116.48 -2.87 -2.40%
Feeder Cattle (P) May 2017 143.78 -4.50 -3.03%
Feeder Cattle (P) Aug 2017 153.42 -4.51 -2.86%
Feeder Cattle (P) Sep 2017 152.10 -4.50 -2.87%
Lean Hogs (P) May 2017 69.40 +0.40 +0.58%
Lean Hogs (P) Jun 2017 76.32 -0.16 -0.21%
Lean Hogs (P) Jul 2017 76.82 -0.53 -0.69%
