Wheat climbs on Ukraine conflict; canola little changed

Geo-political tensions soared this morning when a Malaysian plane carrying 295 was reportedly shot down over the Ukraine-Russian border.

Grain prices, particularly wheat and corn, shot higher initially on the news but then settled back. At the close only wheat had retained a significant gain.

Minneapolis spring wheat closed up nine cents at 6.48 per bushel, or 1.4 percent.

Canola was almost unchanged, soybeans and soy oil fell and corn was up a fraction.

Canola is still supported by concerns about the health of the crop. Warm weather this week is pushing crops along finally, but Saskatchewan Agriculture’s weekly crop report said 61 percent of oilseeds are behind normal development.

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Also, although there is excellent moisture down in the soil, the root system of many crops in the eastern Prairies is shallow and plants will suffer when the surface dries. Showers will be needed soon to maintain growth.

In the western Prairies where there has been little rain for the past several weeks, particularly in the Peace River regions, moisture is needed.

In the U.S. crop market, talk spread that prices have fallen too much. The current outlook is for record yields in the Midwest, but there are many weeks before harvest. Although the current outlook is favourable, traders felt they should adjust price to account for some weather risk.

But with that said, Commodity Weather Group forecasts average U.S. corn yield at 171 bushels per acre. That would top the record high of 164.7 bushels set in 2009.

The forecast is 5.7 bu. higher than the curent USDA forecast of 165.3 bu. per acre.

CWG’s yield estimate would imply production of a record-high 14.3 billion bushels.

Corn in the Midwest is thriving in this week’s weather. Today most of the Midwest has cooler than normal temperatures in the high 70s F.

The big news today came from the Black Sea region where a Malaysian airliner with almost 300 passengers crashed near the Ukraine Russia border. Ukraine has accused Russian militants in the east of the country of shooting the plane down. The plane was flying from Amsterdam to Kuala Lumpur.

This futher heighten the friction which was already rebuilding after a lull following the spring tensions when Russia invaded and annexed Crimea.

Although grain exports have not been affected by the four month conflict, the incident revived worries. At one point spring wheat was up about 3.5 percent but it closed well off the high.

A strike at Argentina’s busy Rosario port, the main grain export position, has paralysed all grain exports from that country. Also truck drivers say they will begin a national strike beginning July 21.

High inflation in the country is eroding wages.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014 450.60 +0.30 +0.07%

Canola Jan 2015 453.40 +0.10 +0.02%

Canola Mar 2015 453.80 -0.20 -0.04%

Canola May 2015 450.20 +0.10 +0.02%

Canola Jul 2015 447.20 +0.20 +0.04%

Milling Wheat Oct 2014 191.00 +3.00 +1.60%

Milling Wheat Dec 2014 196.00 +2.00 +1.03%

Milling Wheat Mar 2015 207.00 +2.00 +0.98%

Durum Wheat Oct 2014 250.00 unch 0.00%

Durum Wheat Dec 2014 256.00 unch 0.00%

Durum Wheat Mar 2015 257.00 unch 0.00%

Barley Oct 2014 137.50 unch 0.00%

Barley Dec 2014 139.50 unch 0.00%

Barley Mar 2015 140.50 unch 0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago

Soybeans Aug 2014 1174.75 -12.5 -1.05%

Soybeans Sep 2014 1110.5 -11 -0.98%

Soybeans Nov 2014 1094 -8 -0.73%

Soybeans Jan 2015 1101.75 -8.75 -0.79%

Soybeans Mar 2015 1109.5 -9.75 -0.87%

Soybeans May 2015 1117 -9.25 -0.82%

Soybean Meal Aug 2014 380.5 -3.2 -0.83%

Soybean Meal Sep 2014 365.2 -1.2 -0.33%

Soybean Meal Oct 2014 358.9 +0.9 +0.25%

Soybean Oil Aug 2014 36.37 -0.46 -1.25%

Soybean Oil Sep 2014 36.46 -0.47 -1.27%

Soybean Oil Oct 2014 36.39 -0.53 -1.44%

Corn Sep 2014 379.5 +1.25 +0.33%

Corn Dec 2014 387.25 +0.5 +0.13%

Corn Mar 2015 399 +0.5 +0.13%

Corn May 2015 407.5 +0.75 +0.18%

Corn Jul 2015 415.25 +0.75 +0.18%

Oats Sep 2014 337.25 -1.75 -0.52%

Oats Dec 2014 332.25 -2.5 -0.75%

Oats Mar 2015 324.75 -3.75 -1.14%

Oats May 2015 317 -3.75 -1.17%

Oats Jul 2015 320.25 -3.75 -1.16%

Wheat Sep 2014 550.75 +12.75 +2.37%

Wheat Dec 2014 573.5 +11.5 +2.05%

Wheat Mar 2015 594.75 +11.25 +1.93%

Wheat May 2015 609 +11 +1.84%

Wheat Jul 2015 620.25 +11 +1.81%

Minneapolis

Spring Wheat Sep 2014 637 +9 +1.43%

Spring Wheat Dec 2014 648 +9 +1.41%

Spring Wheat Mar 2015 661 +7.5 +1.15%

Spring Wheat May 2015 670 +7.75 +1.17%

Spring Wheat Jul 2015 678.25 +7.25 +1.08%

Kansas City

KC HRW Wheat Sep 2014 649 +11.75 +1.84%

KC HRW Wheat Dec 2014 660 +11.5 +1.77%

KC HRW Wheat Mar 2015 667.25 +11.75 +1.79%

KC HRW Wheat May 2015 671.75 +12 +1.82%

KC HRW Wheat Jul 2015 659 +11.5 +1.78%

Light crude oil nearby futures in New York rose $1.99 at $103.19 US per barrel.

The Canadian dollar at noon was 93.00 cents US, down from 93.02 cents the previous trading day. The U.S. dollar at noon was $1.0753 Cdn.

The worries about the conflict in Ukraine pressured stocks lower.

Earlier in the day, the Toronto Stock Exchange composite hit a new record high propelled in part by strong CP Rail share gains after it posted stronger than expected quarterly profit, up 48 percent over the same quarter last year.

In unofficial tallies —

The S&P/TSX composite index ended down 21.86 points, or 0.14 per cent, at 15,204.48.

The Dow Jones industrial average fell 161.39 points or 0.94 percent, to end at 16,976.81.

The S&P 500 lost 23.45 points or 1.18 percent, to finish at 1,958.12.

The Nasdaq Composite dropped 62.52 points or 1.41 percent, to close at 4,363.45.