Crop futures rose Friday amid dry weather in large parts of Canada and the U.S. growing regions and hot conditions in the Prairies.
November canola closed up $6.50 at $510.30.
Compared to the previous Friday, November canola was up $5.50 per tonne, not bad considering that the loonie rose about three-quarters of a cent over the week.
Temperatures are expected in the high 20s to mid 30s over large parts of the Prairies over the next five days with little moisture other than from thunderstorms. The best chance of storm activity over the next few days is in central Alberta and in parts of Manitoba.
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It should be fairly dry in U.S. Midwest over the next seven days.
US WHEAT TOUR
Confirmation of serious yield damage in the U.S. spring wheat crop by the Wheat Quality Council tour this week supported wheat prices.
There are a lot of social media comments from farmers that the tour’s forecast of spring wheat yield potential of 38.1 bu per acre is too high given the drought in the central and western part of the region.
The forecast is was down 8.7 bu. from the five-year average and the lowest since 2008.
There is a wide difference from the Red River Valley on the east side of North Dakota where moisture has not been bad and the west side where drought is severe.
The tour did not issue an estimate of what percentage of wheat fields had been baled for feed. The usual abandonment number will likely be much higher than normal, leading to a smaller total production number than might be assumed given the yield and seeded area estimates.
The current USDA forecast for abandonment is 3.7 percent. In 2002 it was 14 percent and in 1988 it was 22 percent.
Canadian wheat is also suffering, especially in southern areas.
ALBERTA CROP REPORT
Today’s Alberta crop report pegged the provincial crop condition good-to-excellent at 60.1 percent, down four percentage points from the previous week and down from 73.5 percent in the five-year average.
Cereals in the south are generally below 45 percent good to excellent. In the central and northwest they are generally below 65 percent.
The northeast has the best conditions in Alberta.
But even with the challenging conditions, the province’s average yield forecasts are not bad and in line with the five-year average.
It pegged the province wide crop down only one percent from the five-year average. In the 2015 drought the crop was down 10 percent.
The report pegged the yield potential for spring wheat at just over 47 percent, ranging from 38.5 percent in the south to almost 57 bu. in the northwest.
Canola provincial average yield is seen at 38.5 bu. per acre, ranging from 32.8 in the south to 43.2 bu. in the northeast. The 2012-16 five-year average canola yield is 40.9 bu. per acre.
Durum average yield was pegged at just over 39 bu.
Thursday’s Saskatchewan crop report showed serious declines in crop conditions from the previous assessment two weeks ago. The worst conditions were, not surprisingly, in the southern regions.
EXPORTS
The pace is winding down as the crop year nears its end.
In week 51 to July 23 only 139,000 tonnes of canola were exported, down from 152,900 the week before, according to the Canadian Grain Commission.
However with 10.7 million tonnes already exported for the year, that exceeds the forecast of 10.5 million by Agriculture Canada.
Wheat exports were 200,000 tonnes, down from 393,600 the week before.
The total for the year so far is 14.3, down from last year’s almost 16 million and shy of Agriculture Canada’s forecast of 15.6 million tonnes. The final wheat export number as tabulated by Statistics Canada will likely be a little higher than the CGC number because the CGC does not track all export types.
Prices next crop year will have to be high enough to ration demand below this year’s level because total supply will be less than the 20.5 million tonnes available in 2016-17.
CRUSH
Canola crush is also winding down because of tight old crop stocks and worsening crush margins as the Canadian dollar rises above US80 cents.
Crush totaled only 141,544 tonnes in the week to July 26, down almost 19 percent from the week before.
That brings the total to just over nine million tonnes.
It represented only about 66 percent of capacity.
OUTSIDE MARKETS
The Canadian economy grew at a stronger than expected pace in May, up 0.6 percent on the month, bringing the 12 month rate to 4.6 percent, the strongest in 17 years.
This reinforces the expectation that the Bank of Canada will increase interest rates later this year.
Strong recovery in the oil and gas sector helped to power the gross domestic product up 0.6 percent in the month, topping the expected 0.2 percent growth.
Crude oil had its best week this year, climbing about US$4 per barrel, supported by OPEC members rededicating themselves to limiting exports and U.S. crush stockpiles falling more than expected.
Light crude oil nearby futures in New York were up 67 cents US$49.71 per barrel.
In the afternoon, the Canadian dollar was trading around US80.43 cents, up from 79.63 cents the previous trading day. The U.S. dollar was C$1.2433.
The Toronto Stock Exchange’s S&P/TSX composite index closed down 62.71 points, or 0.41 percent, at 15,128.65
The Dow Jones Industrial Average rose 33.76 points, or 0.15 percent, to a new record of 21,830.31, the S&P 500 lost 3.32 points, or 0.13 percent, to 2,472.1 and the Nasdaq Composite dropped 7.51 points, or 0.12 percent, to 6,374.68.
For the week the TSX was down 0.7 percent, the Dow was up 1.2 percent, the S&P 500 dropped 0.2 percent and Nasdaq fell 0.3 percent
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 17 510.30s +6.50 +1.29%
Canola Jan 18 515.20s +6.10 +1.20%
Canola Mar 18 519.00s +5.60 +1.09%
Canola May 18 520.50s +3.80 +0.74%
Canola Jul 18 522.90s +3.20 +0.62%
Milling Wheat Oct 17 283.00s +13.00 +4.81%
Milling Wheat Dec 17 285.00s +8.00 +2.89%
Milling Wheat Mar 18 289.00s +7.00 +2.48%
Durum Wheat Oct 17 309.00s +1.00 +0.32%
Durum Wheat Dec 17 310.00s +1.00 +0.32%
Durum Wheat Mar 18 291.00s unch unch
Barley Oct 17 140.00s unch unch
Barley Dec 17 140.00s unch unch
Barley Mar 18 140.00s unch unch
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound. Prices are displayed with fractions (2/8, 4/8, and 6/8) instead of decimals. -2 equals .25, -4 equals .50, -6 equals .75. The “s” means it is the settlement.
Chicago
Soybeans Aug 17 1000-6s +6-0 +0.60%
Soybeans Sep 17 1006-0s +6-0 +0.60%
Soybeans Nov 17 1013-0s +5-4 +0.55%
Soybeans Jan 18 1021-4s +5-4 +0.54%
Soybeans Mar 18 1025-2s +5-4 +0.54%
Soybean Meal Aug 17 321.0s -1.3 -0.40%
Soybean Meal Sep 17 323.3s -1.1 -0.34%
Soybean Meal Oct 17 325.3s -0.9 -0.28%
Soybean Oil Aug 17 34.61s +0.76 +2.25%
Soybean Oil Sep 17 34.71s +0.74 +2.18%
Soybean Oil Oct 17 34.83s +0.76 +2.23%
Corn Sep 17 374-2s unch unch
Corn Dec 17 388-0s +0-2 +0.06%
Corn Mar 18 399-6s +0-4 +0.13%
Corn May 18 405-0s +0-4 +0.12%
Corn Jul 18 410-0s +0-4 +0.12%
Oats Sep 17 290-2s -1-4 -0.51%
Oats Dec 17 291-6s +0-2 +0.09%
Oats Mar 18 290-6s +1-0 +0.35%
Oats May 18 289-6s +1-0 +0.35%
Oats Jul 18 288-4s +1-0 +0.35%
Wheat Sep 17 481-0s +1-2 +0.26%
Wheat Dec 17 506-0s +1-2 +0.25%
Wheat Mar 18 526-2s +1-0 +0.19%
Wheat May 18 538-0s +1-0 +0.19%
Wheat Jul 18 545-2s +1-0 +0.18%
Minneapolis
Spring Wheat Sep 17 740-4s +4-0 +0.54%
Spring Wheat Dec 17 751-0s +4-4 +0.60%
Spring Wheat Mar 18 746-4s +2-2 +0.30%
Spring Wheat May 18 736-0s -0-4 -0.07%
Spring Wheat Jul 18 723-4s -2-6 -0.38%
Kansas City
Hard Red Wheat Sep 17 481-0s unch unch
Hard Red Wheat Dec 17 508-2s +0-2 +0.05%
Hard Red Wheat Mar 18 526-0s +0-2 +0.05%
Hard Red Wheat May 18 538-6s -0-2 -0.05%
Hard Red Wheat Jul 18 552-0s -1-2 -0.23%
Chicago livestock futures in US¢/pound (rounded to two decimal places)
Live Cattle (Pit) Aug 17 112.900s -1.400 -1.22%
Live Cattle (Pit) Oct 17 112.425s -1.150 -1.01%
Live Cattle (Pit) Dec 17 113.400s -1.000 -0.87%
Feeder Cattle (Pit) Aug 17 146.050s -1.775 -1.20%
Feeder Cattle (Pit) Sep 17 147.100s -1.850 -1.24%
Feeder Cattle (Pit) Oct 17 146.850s -1.400 -0.94%
Lean Hogs (Pit) Aug 17 81.400s -0.850 -1.03%
Lean Hogs (Pit) Oct 17 66.500s -1.175 -1.74%
Lean Hogs (Pit) Dec 17 61.050s -0.750 -1.21%
