Market mayhem ruled in Chicago’s crop futures markets today, and the violent sell-off brutalized canola futures too.
November Winnipeg ICE canola futures fell $22.50 per tonne to $607.20, or from $14.28 per bushel to $13.77.
At one point canola skidded to slightly beneath $600 but quickly recovered as $600 triggers were fired.
The action was similar in the Chicago contracts, which continued yesterday’s rout with an even more demoralizing panicked flight, with almost all crop commodities hitting their limit lows. Prices gushed red ink as speculative longs abandoned positions in a panic.
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It is futile to look for a crop-specific fundamental source for the rout. The crop news has been relatively favourable in the past two days, with USDA confirming that U.S. corn and soybean crops look terrible and weather forecasts showing no general relief from the drought.
However, the sharp run-up in soybean, corn and wheat prices had some skeptical traders believing peak prices were met last week and were ready for either a correction or a major trend reversal. Most drought-induced rallies have peaked in July and then fallen sharply.
Canola still generally looks good in the field, but in Tuesday’s volatile environment that really didn’t matter.
The deadly weakness in buying support for crop futures did not occur in isolation. Tuesday was an appalling day in the world’s markets. Stocks fell for a third day straight, with the Dow Jones Industrial Average falling over 100 points and European equity markets faring worse. As always, nagging doubts about the ability of southern European economies and governments to stay afloat scared investors and sent them scurrying for safety.
Most other commodities were soft but not nearly as flaccid as crops.
Winnipeg (per tonne)
Canola Nov 12 $607.20, down $22.50 -3.57%
Canola Jan 13 $608.40, down $23.60 -3.73%
Canola Mar 13 $609.10, down $22.70 -3.59%
Canola May 13 $605.00, down $22.30 -3.55%
Western Barley Oct 12 $257.00, unchanged
Western Barley Dec 12 $262.00, unchanged
Milling Wheat Oct 12 $334.50, unchanged
Milling Wheat Dec 12 $342.00, unchanged
Milling Wheat Mar 13 $352.00, unchanged
Durum Wheat Oct 12 $327.00, down $12.00 -3.54%
Durum Wheat Dec 12 $331.50, down $12.00 -3.49%
Durum Wheat Mar 13 $338.10, down $12.00 -3.43%
Barley Oct 12 $264.50, unchanged
Barley Dec 12 $269.50, unchanged
Barley Mar 13 $272.50, unchanged
Chicago (per bushel)
Soybeans (P) Aug 12 $16.4925, down 49.25 cents -2.90%
Soybeans (P) Sep 12 $15.9550, down 52.25 -3.17%
Soybeans (P) Nov 12 $15.6950, down 52.75 -3.25%
Soybeans (P) Jan 13 $15.5050, down 51.75 -3.23%
Corn (P) Sep 12 $7.9000, down 24.00
Corn (P) Dec 12 $7.7825, down 7.25
Corn (P) Mar 13 $7.7150, down 5.00 -0.64%
Oats (P) Sep 12 $3.6250, down 18.00 -4.73%
Oats (P) Dec 12 $3.6550, down 16.75 -4.38%
Oats (P) Mar 13 $3.7100, down 15.75 -4.07%
Minneapolis (per bushel)
Spring Wheat Sep 12 $9.6800, down 37.50 cents -3.73%
Spring Wheat Dec 12 $9.6850, down 36.50 -3.63%
Spring Wheat Mar 13 $9.7375, down 33.75 -3.35%
Spring Wheat May 13 $9.7200, down 31.25 -3.11%
The previous day’s best canola basis was $10 over the November contract according to ICE Futures Canada in Winnipeg.
Light crude oil nearby futures in New York rose 36 cents at $88.50 US per barrel.
The Canadian dollar at noon was 97.96 cents US, down from 98.31 cents the previous trading day. The U.S. dollar at noon was $1.0208 Cdn.
