Canola prices continued their pleasant upturn Monday, adding almost another 10 cents per bushel on futures markets and taking it about $15 per tonne above the $421 low reached last week.
Broker Ken Ball of P.I. Financial said he didn’t believe there was an obvious fundamental cause of Monday’s action.
“It was just carrying on what it was doing late last week — a little short covering — but no (canola specific) driving force was behind it,” said Ball.
Vegetable oil prices have been strong in recent sessions, lending canola support.
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Farmers with canola to price will be relieved to see canola’s continued recovery from an almost-unbroken month-long slide that took canola futures from $490 per tonne in early December down almost $70 per tonne before bottoming.
Some traders have recently mused that canola should bottom and bounce after selling off so sharply since harvest, especially compared to soybeans.
Canola has been undermined by the low world value of vegetable oil, but at some point many analysts expect to see canola regain some relative strength compared to soybeans.
Whether that would be by a gain in canola prices or a fall in soybean prices wasn’t clear, but the recent rise has been mostly shared with soybean prices, so not much relative ground has been made up.
U.S. crop futures markets were closed for the Martin Luther King Jr. holiday.
European rapeseed futures were slightly higher and Malaysian palm oil rose more strongly than canola, giving support to the oil-based prairie crop.
China’s government announced that it was planning to switch its commodity price supports from the stockpiling system it has used in recent years to subsidies for farmers, but few details were released. China is a huge soybean importer, so the details of how it will modify its attempts to promote domestic production will be closely watched by the market.
Wheat prices continue to be a millstone around the neck of world crop markets, recently hitting U.S. lows not seen for over three years with ample supplies eliminating any supply worries from the market and hitting lows in Europe last seen at the beginning of October.
Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2014 435.50 +4.40 +1.02%
Canola May 2014 444.70 +4.30 +0.98%
Canola Jul 2014 453.40 +4.10 +0.91%
Canola Nov 2014 467.30 +4.00 +0.86%
Canola Jan 2015 473.10 +4.10 +0.87%
Milling Wheat Mar 2014 182.00 unch 0.00%
Milling Wheat May 2014 186.00 unch 0.00%
Milling Wheat Jul 2014 188.00 unch 0.00%
Durum Wheat Mar 2014 243.00 unch 0.00%
Durum Wheat May 2014 247.00 unch 0.00%
Durum Wheat Jul 2014 248.00 unch 0.00%
Barley Mar 2014 127.00 unch 0.00%
Barley May 2014 129.00 unch 0.00%
Barley Jul 2014 129.00 unch 0.00%
The Canadian dollar at noon was 91.22 cents US, down from 91.23 cents the previous trading day. The U.S. dollar at noon was $1.0962 Cdn.
