Falling loonie strengthens canola

Regardless of a continuation of the incredible sell-off in oil prices and the weakness in stock markets, many crop futures closed higher Monday.

Crops were the strongest commodities category Monday, closing up 0.2 percent overall, led by wheat contracts, which closed up almost two percent overall.

Soybeans and soy oil and meal were the weakest among crop futures, but canola managed a slight increase in price due to the compensating influence of a falling loonie.

Oil fell yet again, after a brief respite early Monday, with WTI in the $55 per barrel range and Brent at $60.

Little significant fundamental news has affected crop futures markets, although traders are looking for things to key on.

Some noted a National Oilseed Processors Association report that found November U.S. soybean crushings to be at the low level of pre-report expectations. However, soyoil stocks are lower than expectations.

Others trotted out the “maybe Russia will suspend grain exports” idea as a bullish factor.

P.I. Financial broker Ken Ball thinks the relative strength of crop futures is mostly due to commodity funds getting back into the category after bailing out a few months ago.

“There’s a lot of fund activity here. The funds are definitely sticking their noses in,” said Ball.

That’s given crops an odd freedom from the down-sucking influence of crude oil, which used to draw almost all commodities along with it in lockstep.

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Metals, both an industrial and general commodity strength gauge, had a worse day than oil, with silver falling four percent and gold two percent. Copper fell 2.2 percent.

Why the funds are chasing crops again is hard to tell. It’s possible that some see crops as relatively cheap and are chasing them up. Other money might be getting redirected from plummeting oil futures.

Stock markets are in an unsure position presently, especially considering the drop in oil prices. While floating near all-time record highs, U.S. stock indexes are also coming off their biggest weekly losses since 2012, and Monday’s continuation didn’t help.

It’s close to Christmas, so few expect major market moves in the next few days, but if Santa Claus is going to pull his usual “Santa Claus rally,” the old boy had better get moving.

Light crude oil nearby futures in New York down $1.90 to US$55.91 per barrel.
The Canadian dollar at noon was US85.98 cents, down from 86.66 cents the previous trading day. The U.S. dollar at noon was C$1.1630.

Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2015 440.00 +0.20 +0.05%
Canola Mar 2015 436.80 +0.60 +0.14%
Canola May 2015 436.50 +0.70 +0.16%
Canola Jul 2015 437.60 +1.10 +0.25%
Canola Nov 2015 433.70 +0.20 +0.05%

Milling Wheat Mar 2015 238.00 +5.00 +2.15%
Milling Wheat May 2015 240.00 +4.00 +1.69%
Milling Wheat Jul 2015 243.00 +4.00 +1.67%

Durum Wheat Mar 2015 357.50 unch 0.00%
Durum Wheat May 2015 357.50 unch 0.00%
Durum Wheat Jul 2015 357.50 unch 0.00%

Barley Mar 2015 177.00 unch 0.00%
Barley May 2015 179.00 unch 0.00%
Barley Jul 2015 181.00 unch 0.00%

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

Chicago
Soybeans Jan 2015 1039.5 -7.75 -0.74%
Soybeans Mar 2015 1046 -7.75 -0.74%
Soybeans May 2015 1051 -8.5 -0.80%
Soybeans Jul 2015 1056 -8.5 -0.80%
Soybeans Aug 2015 1053 -6.25 -0.59%
Soybeans Sep 2015 1030 -8.5 -0.82%

Soybean Meal Jan 2015 365.4 -1.6 -0.44%
Soybean Meal Mar 2015 353.9 -2.4 -0.67%
Soybean Meal May 2015 347.3 -3.4 -0.97%

Soybean Oil Jan 2015 32.27 -0.09 -0.28%
Soybean Oil Mar 2015 32.46 -0.11 -0.34%
Soybean Oil May 2015 32.67 -0.12 -0.37%

Corn Mar 2015 408.5 +1 +0.25%
Corn May 2015 416.5 +0.75 +0.18%
Corn Jul 2015 422.5 +1 +0.24%
Corn Sep 2015 425.5 +0.75 +0.18%
Corn Dec 2015 432.75 +1 +0.23%

Oats Mar 2015 313.75 +1.25 +0.40%
Oats May 2015 317.25 +1.5 +0.48%
Oats Jul 2015 319 +1 +0.31%
Oats Sep 2015 317.5 +2 +0.63%
Oats Dec 2015 309.5 +0.5 +0.16%

Wheat Mar 2015 619 +12.5 +2.06%
Wheat May 2015 621.25 +12.5 +2.05%
Wheat Jul 2015 620.25 +12.5 +2.06%
Wheat Sep 2015 627.75 +12 +1.95%
Wheat Dec 2015 638.75 +11.75 +1.87%

Minneapolis
Spring Wheat Mar 2015 632.5 +11.75 +1.89%
Spring Wheat May 2015 637.75 +10.75 +1.71%
Spring Wheat Jul 2015 644.5 +10.5 +1.66%
Spring Wheat Sep 2015 650.75 +9.5 +1.48%
Spring Wheat Dec 2015 662.75 +8.25 +1.26%

Kansas City
Hard Red Wheat Mar 2015 647 +12.75 +2.01%
Hard Red Wheat May 2015 649.5 +12.5 +1.96%
Hard Red Wheat Jul 2015 653.25 +13 +2.03%
Hard Red Wheat Sep 2015 662.25 +13 +2.00%
Hard Red Wheat Dec 2015 675.75 +12 +1.81%

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Contact ed.white@producer.com

  • Concerned farmer

    Canola is way under valued , with the cost if inputs . Especially the unreasonable seed costs . Canola should Start at 10 and be around 14 dollars per bu . More and more farmers are cutting acres , maybe when there is a shortage if canola and even wheat , maybe then they will pay what it is really worth . We can’t keep selling products way below the cost of production and expect to stay in business . I am an economist and there is no way it can be done , no matter what the size of producer you are . You can not turn a product that costs you money to produce into a profit unless you selling price is higher than your input costs . The gaps are just to big to close . Economies of scale can only narrow these gaps . But never eliminate them .

  • ed

    Canola, like wheat now after Aug. 1st, 2012 has always been sold by farmers at hugh discounts compared to the port price. Because this all happens in secret as is the case now with wheat, the big companies can easily get away with offering what the most financially distressed farmer would sell at to float his boat a bit longer. That is now basically the price as it moves up and down in a very tight range. Not producing it is the best bet for a few years now. You don’t have to be an economist to figure this out.