If you had gone away for two weeks of summer holidays and came back Monday, you might think nothing had been happening in the market.
But that would have only applied to the canola futures market, which has been relatively flat and rangebound since mid-July, with most other crops gradually trending down.
“It’s certainly holding up well and trading relatively firmly,” said P.I. Financial broker Ken Ball after the close on Monday.
November canola has traded between $486 and $519 per tonne, with most of the last six weeks spent straddling the $500 market at $490 to $510.
Meanwhile the soybean market has given back all the gains it experienced since Canada Day, with November soybeans floating below $9.40 per bushel, well beneath the plus-$10 levels that held for most of July.
Spring wheat has continued to grind lower, hitting $6.69 Monday after an almost two percent decline, taking it far below the $8.00 peaks of early July.
Corn ground lower too, settling to $3.63 per bushel as the decline that began in early July continues seemingly inexorably.
Canola prices might not seem strong by themselves, but their ability to haunt the $500 zone for six weeks has been impressive in the context of almost everything else steadily weakening. That reveals the different fundamental situation between U.S. soybeans and canola. There just isn’t enough canola to go around, while soybeans are not nearly as tight.
“It’s certainly doing its job,” said Ball about canola’s relatively high price and strength.
“It’s performing its rationing function.”