Crop markets posted solid gains Tuesday on concerns about weather in the United States and South America.
Active U.S. grain exports also supported prices.
Canola rose, but gains were limited by the big crop, large stocks and transportation problems.
Wheat was the biggest mover of the three major U.S. grains.
Monthly updates on winter wheat crop conditions sparked the rally. The USDA state reports downgraded the condition of the winter wheat crops in Kansas, Oklahoma and Texas. Cold and dry weather hurt the condition. The crop in Kansas, the biggest wheat producing state, was rated 20 percent poor to very poor at the end of the month, down from six percent at the end of December.
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The winter wheat crop is still dormant. Today a blizzard is sweeping across Kansas, delivering up to 25 centimetres (10 inches) of snow.
Nearby Chicago wheat futures rose 3.68 percent, Kansas wheat rose 3.56 percent and Minneapolis rose 2.09 percent
Wheat’s strength supported corn, as did news about South American corn production. We often focus on the soybean crop there, but the region is also a major corn producer.
Private analytics firm Informa Economics cut its forecast for Argentina’s corn crop to 22.6 million tonnes from 25 million, Reuters reported. It also lowered its outlook for Brazil corn production by one million tonnes to 66.55 million. It trimmed its Argentina soybean forecast by 500,000 tonnes but increased its Brazil soybean forecast by one million tonnes.
Argentina’s corn crop was trimmed by the intense heat early in January. Now it is receiving regular rain, perhaps too much, raising the potential for local flooding and disease problems.
Meanwhile there is an area of Brazil that is getting dry. That is good for crops ready for harvest, but late planted crops could be stressed.
These weather factors supported U.S. soybean prices, as did the strong pace of U.S. soy meal exports.
March soybeans climbed back above the psychologically important $13 per bushel level.
All this helped lift canola futures on a day when the fundamental news for the crop was negative.
Statistics Canada today pegged Dec. 31 stocks of the oilseed at 12.597 million tonnes up 55 percent year over year, and surpassing the average trade estimate of 12.3 million tonnes.
All-wheat supplies were pegged at 28.381 million tonnes, an increase of 38 percent.
The size of the stocks will keep Canadian grain prices depressed right through the coming crop year. Only a surprise major crop failure somewhere in the world would change the outlook.
The rail transport problems continue to generate attention. The federal government yesterday told the rail industry it must start collecting statistics on rail car deliveries and movement on a weekly basis and provide monthly reports. The data has until now come out quarterly.
Also there is much discussion about whether the rail cap limits grain movement at this critical time. Stories appearing in the Feb. 6 Western Producer look at this issue and other factors affecting grain transportation.
Mark Hemmes, president of Quorum Corp., the government appointed monitor of the Prairie grain handling and transportation system, says there is little evidence that removing the cap would improve service.
Bargain hunting helped equity markets partly climb back from the rout on Monday caused by worries over the pace of U.S. economic growth, weaker China economic data and jitters over emerging markets.
Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2014 429.60 +3.20 +0.75%
Canola May 2014 440.00 +3.40 +0.78%
Canola Jul 2014 449.00 +3.70 +0.83%
Canola Nov 2014 464.20 +3.40 +0.74%
Canola Jan 2015 469.70 +3.40 +0.73%
Milling Wheat Mar 2014 182.00 +5.00 +2.82%
Milling Wheat May 2014 186.00 +5.00 +2.76%
Milling Wheat Jul 2014 189.00 +5.00 +2.72%
Durum Wheat Mar 2014 245.00 unch 0.00%
Durum Wheat May 2014 249.00 unch 0.00%
Durum Wheat Jul 2014 250.00 unch 0.00%
Barley Mar 2014 126.50 unch 0.00%
Barley May 2014 128.50 unch 0.00%
Barley Jul 2014 128.50 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Mar 2014 1313.25 +20.5 +1.59%
Soybeans May 2014 1297.5 +19.25 +1.51%
Soybeans Jul 2014 1279.5 +17.25 +1.37%
Soybeans Aug 2014 1233.5 +13.5 +1.11%
Soybeans Sep 2014 1160 +9 +0.78%
Soybeans Nov 2014 1110.5 +2 +0.18%
Soybean Meal Mar 2014 447 +13 +3.00%
Soybean Meal May 2014 424.8 +7.7 +1.85%
Soybean Meal Jul 2014 413.2 +6.7 +1.65%
Soybean Oil Mar 2014 37.71 +0.26 +0.69%
Soybean Oil May 2014 38.01 +0.25 +0.66%
Soybean Oil Jul 2014 38.34 +0.25 +0.66%
Corn Mar 2014 441.75 +6 +1.38%
Corn May 2014 447.75 +6 +1.36%
Corn Jul 2014 452.75 +6 +1.34%
Corn Sep 2014 455.5 +6.5 +1.45%
Corn Dec 2014 459.25 +6.25 +1.38%
Oats Mar 2014 424.5 +9.75 +2.35%
Oats May 2014 371.75 +3.5 +0.95%
Oats Jul 2014 337.75 +0.25 +0.07%
Oats Sep 2014 317.25 +7 +2.26%
Oats Dec 2014 302.25 +6.5 +2.20%
Wheat Mar 2014 584.5 +20.75 +3.68%
Wheat May 2014 586.75 +21 +3.71%
Wheat Jul 2014 590 +21.25 +3.74%
Wheat Sep 2014 598.5 +21.5 +3.73%
Wheat Dec 2014 611.25 +21.5 +3.65%
Minneapolis
Spring Wheat Mar 2014 623.5 +12.75 +2.09%
Spring Wheat May 2014 617.75 +13 +2.15%
Spring Wheat Jul 2014 624 +12.5 +2.04%
Spring Wheat Sep 2014 632 +11.5 +1.85%
Spring Wheat Dec 2014 645.25 +12.5 +1.98%
Kansas City
KCBT Red Wheat Mar 2014 646.5 +22.25 +3.56%
KCBT Red Wheat May 2014 637.5 +19.75 +3.20%
KCBT Red Wheat Jul 2014 630.5 +20 +3.28%
KCBT Red Wheat Sep 2014 638.5 +18.75 +3.03%
KCBT Red Wheat Dec 2014 649 +16.75 +2.65%
Light crude oil nearby futures in New York rose 76 cents at $97.19 US per barrel.
The Canadian dollar at noon was 90.46 cents US, up from 90.29 cents the previous trading day. The U.S. dollar at noon was $1.1055 Cdn.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 18.28 points, or 0.14 percent, at 13,504.48.
The Dow Jones industrial average rose 72.44 points or 0.47 percent, to end at 15,445.24.
The S&P 500 gained 13.31 points or 0.76 percent, to finish at 1,755.20.
The Nasdaq Composite added 34.562 points or 0.86 percent, to close at 4,031.52.
