Crops were the big losers in Monday’s commodity futures markets, but canola was stronger than most, its existing discount stopping it joining the slide.
“Canola is still relatively cheap, particularly old crop, and at this time of year, commercials just can’t afford to take chances,” said Ken Ball, a broker with P.I. Financial.
“When canola is that cheap, they just can’t afford to leave it sitting on the table there.”
While soybean futures were sharply down and most cereals were moderately lower, oats futures rose three cents and canola made small gains, advancing almost a penny per bushel for November futures while old crop July rose about eight cents per bushel.
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Both soybean oil and soybean meal fell on the day, so canola’s relative strength compared to soybeans wasn’t due to oil value.
Canola is presently heavily discounted compared to soybeans, with July soybean futures at a premium of about $50 per tonne compared to July canola, but November soybeans are only at about a $20 per tonne premium. That gives crushers an incentive to rush forward with canola crushing during the summer while its oil and meal can compete against soybean components more easily.
Ball said the slump in old crop soybean prices Monday wasn’t good for bulls because that has been the biggest bull factor in the markets since the fall.
The Friday U.S. Department of Agriculture estimate for old crop soybean supplies, part of the World Agricultural Supply and Demand Estimates, was actually bullish, so the weakness Monday is a clearly bearish sign.
“I think the market has quickly realized that old crop bean situation is pretty much a thing of the past,” said Ball.
“It’s getting to be pretty old news now and it’s been one of the biggest crutches holding all things up.”
Planting and seeding progress is occurring across the U.S. and Canada, and that is said to be a bearish influence.
Wheat futures have been going sideways in recent sessions as some contracts are flirting with resistance levels. Friday’s USDA numbers were generally considered neutral to wheat and bearish for corn.
Stock markets were generally stronger Monday, in record high territory, as some investors gobbled up discounted stocks like Facebook and Twitter, which have suffered recently.
Winnipeg ICE Futures Canada dollars per tonne
Canola May 2014 498.60 +3.50 +0.71%
Canola Jul 2014 484.60 +3.50 +0.73%
Canola Nov 2014 486.30 +0.40 +0.08%
Canola Jan 2015 490.70 -0.30 -0.06%
Canola Mar 2015 494.80 -0.80 -0.16%
Milling Wheat May 2014 240.00 -3.00 -1.23%
Milling Wheat Jul 2014 245.00 -3.00 -1.21%
Milling Wheat Oct 2014 246.00 -2.00 -0.81%
Durum Wheat May 2014 247.00 unch 0.00%
Durum Wheat Jul 2014 252.00 +5.00 +2.02%
Durum Wheat Oct 2014 243.00 +1.00 +0.41%
Barley May 2014 139.50 unch 0.00%
Barley Jul 2014 141.50 +1.00 +0.71%
Barley Oct 2014 141.50 +1.00 +0.71%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans May 2014 1483.75 -17.25 -1.15%
Soybeans Jul 2014 1465.25 -21.75 -1.46%
Soybeans Aug 2014 1404.75 -18 -1.27%
Soybeans Sep 2014 1270 -15.5 -1.21%
Soybeans Nov 2014 1212.25 -14 -1.14%
Soybeans Jan 2015 1218.75 -14 -1.14%
Soybean Meal May 2014 489.5 -8 -1.61%
Soybean Meal Jul 2014 478.2 -9.1 -1.87%
Soybean Meal Aug 2014 455.2 -6.9 -1.49%
Soybean Oil May 2014 40.78 -0.2 -0.49%
Soybean Oil Jul 2014 40.98 -0.2 -0.49%
Soybean Oil Aug 2014 40.9 -0.2 -0.49%
Corn May 2014 497.5 -7.5 -1.49%
Corn Jul 2014 499.5 -8 -1.58%
Corn Sep 2014 494 -7.75 -1.54%
Corn Dec 2014 492 -6.75 -1.35%
Corn Mar 2015 500.5 -5.75 -1.14%
Oats May 2014 410 +0.75 +0.18%
Oats Jul 2014 357 +3.75 +1.06%
Oats Sep 2014 343.25 +3 +0.88%
Oats Dec 2014 333.25 +3.5 +1.06%
Oats Mar 2015 329 +0.75 +0.23%
Wheat May 2014 705.5 -8.5 -1.19%
Wheat Jul 2014 715 -7.5 -1.04%
Wheat Sep 2014 724 -7 -0.96%
Wheat Dec 2014 739.25 -6 -0.81%
Wheat Mar 2015 752.25 -6 -0.79%
Minneapolis
Spring Wheat May 2014 792 -2.75 -0.35%
Spring Wheat Jul 2014 790.75 -4.5 -0.57%
Spring Wheat Sep 2014 797.75 -3.75 -0.47%
Spring Wheat Dec 2014 808.5 -2.75 -0.34%
Spring Wheat Mar 2015 815.25 -3 -0.37%
Kansas City
KC HRW Wheat May 2014 824 +5 +0.61%
KC HRW Wheat Jul 2014 824.5 -4.25 -0.51%
KC HRW Wheat Sep 2014 830.5 -3.5 -0.42%
KC HRW Wheat Dec 2014 841.75 -2 -0.24%
KC HRW Wheat Mar 2015 845.25 -1.5 -0.18%
Light crude oil nearby futures in New York rose 60 cents at $100.59 US per barrel.
The Canadian dollar at noon was 91.85 cents US, up from 91.74 cents the previous trading day. The U.S. dollar at noon was $1.0887 Cdn.
