November canola managed to stay afloat Monday, closing $1.50 per tonne above the previous close and $1 above the session’s opening level of $562.
The expiring July contract closed up $1.30 at $561.50.
The November close was close to the session high of $558.90, and at $544.10 was well above the session low of $545.
The markets were quiet, with the main North American exchanges closed for the American Independence Day holiday.
There is much anticipation of what will happen tomorrow, when U.S. traders return to the pits and their computer terminals to revive the main crop markets.
Corn futures were badly beaten last week after the U.S. Department of Agriculture found that American farmers had planted more than a million more acres than most analysts expected, and that there was more corn in storage than expected.
Corn futures in Chicago fell limit-down Thursday after the report was released, and continued a violent, although not limit-down, descent Friday.
Wheat futures were dragged down with corn, and even oats fell, regardless of tight fundamentals.
Soybeans were firmer, and canola was not routed, although it fell.
Beyond the surprising acreage and stocks numbers in the USDA reports, markets have been concerned about many elements of underlying market demand, and corn had experienced the most heady gains of the past year among the major food crops, so some analysts felt corn “had it coming.”
Concerns about the Greek debt crisis, other “Club Med” worries, the gaping hole in U.S. public finances that its political class can’t seem to close and Chinese attempts to restrain inflation and commodity prices have been haunting commodity markets recently. The official expiry of QE2 — Quantitative Easing, part two — by the U.S. Federal Reserve Bank, is also worrying markets.
QE2 has been credited by some with keeping the U.S. and world economies from slipping into a “double dip” recession, but it has also been blamed for sending yield-hungry money into unorthodox assets, such as junk bonds and commodities. Some analysts say the commodity rally of the past year is mostly to do with the artificially low interest rates induced by QE2 and that the expiry of the program will cause financial interest rates to rise and reverse the flow of money into commodities, prompting a weakening of commodity prices.
Winnipeg (per tonne)
Canola July 11 $561.50, up $1.30
Canola Nov. 11 $554.10, up $1.50
Canola Jan. 12 $560.70, up $1.10
Canola March 12 $565.50, up $1.80
Western Barley July 11 $207.00, unchanged
Chicago (per bushel)
Soybeans July 11 $13.2225, up 16.00 cents
Soybeans Aug. 11 $13.1275, up 13.25
Soybeans Nov. 11 $13.1250, up 18.50
Corn July 11 $6.4075, up 11.75
Corn Dec. 11 $5.9675, down 23.75
Oats July 11 $3.3950, up 5.50
Oats Dec. 11 $3.5300, up 6.00
Minneapolis (per bushel)
Spring Wheat July 11 $8.3100, up 7.75 cents
Spring Wheat Sep. 11 $8.0450, up 9.50
Spring Wheat Dec. 11 $8.0450, up 12.25
