Canola continued its sickening slide Monday, with January canola futures falling into the $460s per tonne and March falling into the $470s.
At the same time, soybean futures prices rose, notching 15 to 18 cent per bushel gains in Chicago and being the hottest spot in the grains complex.
That divergence of the two vegetable oil crops has become a familiar recent story.
“It’s just a continuation,” said Ken Ball of P.I. Financial.
“Canola lost $8 to U.S. markets Friday. It lost another eight dollars a tonne to the U.S. markets today. It has now lost $60 per tonne in the last few weeks in relative value.”
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Soybeans’ value was pepped up by news of more Chinese buying, something traders keep waiting to end, but the glut of Canadian canola is making canola futures trend lower and basis levels spread wide.
Soybean prices were helped by soybean meal prices being the strongest gainers of the crop futures complex, while canola’s value was hurt by soybean oil’s weakness to be the second-poorest performing grain contract, exceeded on the downside by only canola.
The Statistics Canada final crop production report of 2013 last week highlighted that glut, and air continues to whistle out of the market. Buyers are not worried about Canada running out of canola any time soon.
Ball said that at some point canola is likely to have a good rally because it has become so heavily sold off, but few are willing to step in now and catch the falling knife. While canola by itself could recover some ground compared to soybeans, soybeans themselves are likely to fall once Chinese buying falters, and that could take everything lower.
Canola’s best bet is to clear itself from the Prairies as fast as possible to remove the heaviness of the market, something presently aided by the relative price of canola versus soybeans.
“Canola’s very, very cheap,” said Ball.
“It’s very affordably priced.”
Most other crops were only a few cents different from the previous session. Chicago and Minneapolis wheat were slightly down, but Kansas City was slightly higher.
Oats rose a few cents.
Equity markets mostly rose modestly Monday.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2014 466.30 -5.60 -1.19%
Canola Mar 2014 476.30 -5.50 -1.14%
Canola May 2014 485.20 -5.80 -1.18%
Canola Jul 2014 492.80 -5.60 -1.12%
Canola Nov 2014 503.30 -5.80 -1.14%
Milling Wheat Dec 2013 202.00 -1.00
Milling Wheat May 2014 227.00 -1.00
Durum Wheat Dec 2013 245.00 unch 0.00%
Durum Wheat Mar 2014 251.00 unch 0.00%
Durum Wheat May 2014 255.00 unch 0.00%
Barley Dec 2013 152.00 unch 0.00%
Barley Mar 2014 154.00 unch 0.00%
Barley May 2014 155.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jan 2014 1343.75 +18.25 +1.38%
Soybeans Mar 2014 1326.75 +16.25 +1.24%
Soybeans May 2014 1311.75 +15.25 +1.18%
Soybeans Jul 2014 1299.75 +12 +0.93%
Soybeans Aug 2014 1266 +7.5 +0.60%
Soybeans Sep 2014 1210.25 +8.75 +0.73%
Soybean Meal Dec 2013 461.6 +14.3 +3.20%
Soybean Meal Jan 2014 438.7 +11.3 +2.64%
Soybean Meal Mar 2014 428.5 +9.4 +2.24%
Soybean Oil Dec 2013 40.05 -0.23 -0.57%
Soybean Oil Jan 2014 40.22 -0.27 -0.67%
Soybean Oil Mar 2014 40.61 -0.28 -0.68%
Corn Dec 2013 428.5 +4.5 +1.06%
Corn Mar 2014 438 +3.75 +0.86%
Corn May 2014 446.5 +3.75 +0.85%
Corn Jul 2014 453.5 +3.75 +0.83%
Corn Sep 2014 459.75 +3.75 +0.82%
Oats Dec 2013 371.75 +5.75 +1.57%
Oats Mar 2014 332.25 +4.25 +1.30%
Oats May 2014 319.5 +3 +0.95%
Oats Jul 2014 317.5 +1.5 +0.47%
Oats Sep 2014 324 +1.5 +0.47%
Wheat Dec 2013 639 +1.75 +0.27%
Wheat May 2014 655.5 -1 -0.15%
Wheat Jul 2014 653 -1 -0.15%
Wheat Sep 2014 661.75 -0.5 -0.08%
Minneapolis
Spring Wheat Dec 2013 668 +5 +0.75%
Spring Wheat Mar 2014 676.75 -4.25 -0.62%
Spring Wheat May 2014 686.75 -4 -0.58%
Spring Wheat Jul 2014 694.75 -3.5 -0.50%
Spring Wheat Sep 2014 703.25 -2.25 -0.32%
Kansas City
KCBT Red Wheat Dec 2013 703.5 -1.75 -0.25%
KCBT Red Wheat Mar 2014 696 +0.5 +0.07%
KCBT Red Wheat May 2014 697 +0.75 +0.11%
KCBT Red Wheat Jul 2014 689 +0.5 +0.07%
KCBT Red Wheat Sep 2014 698 -0.5 -0.07%
Light crude oil nearby futures in New York dropped 31 cents at $97.34 US per barrel.
The Canadian dollar at noon was 93.98 cents US, up from 93.78 cents the previous trading day. The U.S. dollar at noon was $1.0641 Cdn.
