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Canadian Stocks Rise as Commodities Gain on Fed Speculation

Canadian stocks rose, capping a weekly gain, as agriculture stocks soared after the U.S. cut its estimate of the corn harvest and energy and metal prices advanced on speculation of further central-bank stimulus there.

Agrium Inc., Canada’s second-largest fertilizer producer, increased 7.1 percent after the U.S. Agriculture Department said corn production will decrease from last year’s record. Suncor Energy Inc., Canada’s biggest oil and gas producer, climbed 2.8 percent after the U.S. reported more job losses than most economists had forecast. Teck Resources Ltd., Canada’s largest base-metals and coal producer, rose 2.5 percent as copper surged.

The Standard & Poor’s/TSX Composite Index rallied 89.66 points, or 0.7 percent, to a two-year high of 12,535.59 for a 1.4 percent weekly increase.

“Everyone now expects the U.S. Fed to come to the rescue of the system, probably starting in November,” said Adrian Mastracci, a money manager at KCM Wealth Management Inc. in Vancouver, referring to the Federal Reserve. “They see a white knight coming along very shortly.”

The S&P/TSX completed its first series of four straight weekly gains since September 2009. The Canadian benchmark has increased 3.6 percent during its streak, led by raw-materials companies, as the U.S. dollar has dropped on concerns new stimulus measures will weaken the currency.

Grains Soar

The U.S. reduced its corn-harvest estimate by 3.8 percent from last month’s forecast, citing flooding in June and hot, dry Midwest weather in August. Corn futures for December delivery soared 6 percent, the most allowed on the Chicago Board of Trade, while wheat jumped the maximum 9.1 percent after the U.S. cut its world inventory estimate.

Agrium, which is also a retail supplier of fertilizer, surged 7.1 percent to a two-year high of C$82.12. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 2.8 percent to C$147.50. Viterra Inc., Canada’s largest grain handler, climbed 4.3 percent to C$9.45.

Prices of energy and raw materials also gained as investors bet the U.S. employment data will help convince the Fed to begin a new round of asset purchases.

U.S. non-farm payrolls dropped by 95,000 in September, the Labor Department said today in Washington. Economists had forecast a decline of 5,000 jobs, according to the median of 87 estimates in a Bloomberg survey.

Commodities Jump

The Thomson Reuters/Jefferies CRB Commodity Price Index jumped 2.7 percent, the most in 10 months, to a 23-month high. Crude oil rose 1.2 percent and natural gas 0.9 percent.

Suncor gained 2.8 percent to C$35.04. Cenovus Energy Inc., the country’s sixth-biggest energy company by market value, advanced 1.3 percent to C$29.79. Penn West Energy Trust, Canada’s second-largest energy trust, increased 4.3 percent, the most in eight months, to C$21.91.

Copper rebounded 2.6 percent after slumping 2 percent yesterday, the most in 11 weeks.

Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, rose 2.6 percent to C$24.84. Teck climbed 2.5 percent to C$45.01. Equinox Minerals Ltd., which mines copper in Africa, rallied 4.8 percent to C$5.93.

Gold gained 0.8 percent and silver 2.3 percent in New York as the U.S. dollar slipped to an eight-month low against a basket of world currencies.

Gold, Silver

Barrick Gold Corp., the world’s largest gold producer, advanced 1.2 percent to C$49.08. Agnico-Eagle Mines Ltd., Canada’s fifth-biggest gold producer by total revenue, increased 1.2 percent to C$73.48. Silver reseller Silver Wheaton Corp. climbed 1.7 percent to C$26.97.

Nevsun Resources Ltd., which mines gold in Africa, soared 6.1 percent to $5.42. In a note dated yesterday, Pierre Vaillancourt, an analyst at Macquarie Group Ltd., raised his 12-month price estimate on the stock to C$6 from C$3.80, according to Bloomberg data.

BlackBerry maker Research In Motion Ltd. rose 2.3 percent to C$49.98 after the United Arab Emirates said BlackBerry services now comply with the country’s security requirements. The country had planned to ban BlackBerry communication on Oct. 11 had it not come to an agreement with the Waterloo, Ontario, company.

Jazz Air Income Fund, the regional carrier that flies on behalf of Air Canada, jumped 8.2 percent, the most in 14 months, to C$5.04 after announcing plans to convert to a corporation by the end of the year. The company, to be known as Chorus Aviation Inc., said it expects to maintain its annual dividend level of 60 cents a share.

SNC-Lavalin Group Inc., Canada’s largest construction company, gained 2.6 percent to C$52.78. The company said it plans to exercise a first-refusal right to buy another 10 percent of the 407 Express Toll Route near Toronto, increasing its stake to 27 percent.

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