Brexit gives final kick to terrible week on crop markets: canola falls again

Reading Time: 4 minutes

Published: June 24, 2016

,

The market uncertainty and currency fluctuations caused by the Brexit vote added to the negativity that has hung over crop markets all week.

Canola futures fell again on Friday, along with other crop markets that have swooned as the weather in North America is mostly favourable for crop development.

A 52 percent majority of Britons on Thursday voted to leave the European Union, and Prime Minister David Cameron said he will resign. That sent markets into turmoil with the British pound down more than 10 percent against the U.S. dollar and the euro also lower versus the greeenback.

Read Also

Photo: JHVEPhoto/Getty Images Plus

U.S. grains: Soybean futures jump on hopes for US export demand

Chicago Board of Trade soybean futures jumped on hopes for U.S. export demand on Wednesday, while corn futures rose for a third day to extend a recovery from contract lows, analysts said.

The process of leaving the bloc will have to be negotiated and could take years. The situation throws uncertainty into Canada’s unratified trade deal with the EU. It will likely delay any US-EU trade deal and also could give momentum to “leave the EU” groups in other member countries, potentially throwing the bloc into turmoil.

The rising U.S. buck today put pressure on American crop futures. Old crop oats was the only crop to rise today.

July canola closed at $464.20, down $9 or 1.9 percent and November closed at $476.90, down $8.30 or 1.7 percent.

Since the market turned south June 15 July canola has fallen about $62 a tonne, or almost 12 percent.

New crop November fell about $54 or about 10 percent since July 15.

The pain on the cash market is partly offset by a narrowing basis.

WATCH THIS WEEK’S VIDEO CROP MARKET UPDATE

Rain is expected over most of Manitoba and into eastern Saskatchewan tonight and Saturday with heavy accumulations in north central Manitoba. Amounts of a half inch or more could also fall in much of Alberta Saturday.

The longer term forecast for the first week of July shows a drier trend in the southern Prairies. If there is rain it would likely fall in the northern grainbelt. Also, all the Prairies are expected to have warm weather in early July.

The U.S. Midwest is expected to be cooler than normal next week and in the first week of July. That will likely be bearish for corn and soybean prices.

The weekly canola crush was 153,555 tonnes, down three percent from the week before. That represented 74.3 percent of industry capacity, compared to the year’s average of 81.6 percent.

Canola exports for week 46 (June 13-19) were only 71,700 tonnes, down from 181,400 the week before.

Soybeans fell about two percent on Friday and corn was down a little less than one percent.

For the week, corn was down 12 percent, its biggest weekly decline in three years. Soybeans were down 5.6 percent

Soymeal was off 7.2 percent this week, its third straight week of declines. Soyoil posted a weekly decline of 2.7 percent.

For the week, Chicago wheat was down 3.3 percent, Kansas July winter wheat ended down 38 cents a bushel, or 8.2 percent, amid reports of above-average yields from the U.S. hard red winter wheat harvest.

MGEX July spring wheat ended down 22 cents, or four percent, for the week.

Rain in western Europe could be hurting the quality of the wheat crop there and the price spread between low and high quality grain is increasing.

Farm office FranceAgriMer said crop ratings declined again in the week to June 20, with 71 percent of soft wheat rated good or excellent compared with 75 percent a week earlier.

Light crude oil nearby futures in New York were down $2.47 to US$47.64 per barrel.

The Canadian dollar at noon was US77.21 cents, down from 78.42 cents the previous trading day. The U.S. dollar at noon was C$1.2952.

Financial and energy stocks fell Friday but gold miners rose as investors shifted money into “safe havens” such as gold and the U.S. dollar.

The Toronto Stock Exchange’s S&P/TSX composite index closed down 239.50 points, or 1.69 percent, at 13,891.88. It barely changed on the week.

The Dow Jones industrial average today fell 611.21 points, or 3.39 percent, to 17,399.86, the S&P 500 lost 76.02 points, or 3.6 percent, to 2,037.3 and the Nasdaq Composite dropped 202.06 points, or 4.12 percent, to 4,707.98.

For the week the Dow fell 1.6 percent, the S&P 500 fell 1.6 percent and the Nasdaq fell 1.9 percent.

 

Winnipeg ICE Futures Canada dollars per tonne

Canola May 2017   498.70   -0.50  -0.10%

Canola Jul 2017   499.70   -1.30   -0.26%

Canola Nov 2017   496.00   +1.50   +0.30%

Canola Jan 2018   499.60   +1.80   +0.36%

Canola Mar 2018   500.40   +1.00   +0.20%

 

Milling Wheat Jul 2016   227.00   unch   0.00%

Milling Wheat Oct 2016   224.00   unch   0.00%

 

Durum Wheat Jul 2016   300.00   unch   0.00%

Durum Wheat Oct 2016   296.00   unch   0.00%

 

Barley Jul 2016   171.50   unch   0.00%

Barley Oct 2016   171.50   unch   0.00%

 

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

 

Chicago

Soybeans Jul 2016   1103.00   -21.50   -1.91%

Soybeans Aug 2016   1101.50   -22.00   -1.96%

Soybeans Sep 2016   1086.25   -22.75   -2.05%

Soybeans Nov 2016   1078.50   -23.00   -2.09%

Soybeans Jan 2017   1076.50   -22.50   -2.05%

Soybeans Mar 2017   1048.00   -19.25   -1.80%

 

Soybean Meal Jul 2016   375.60   -7.60   -1.98%

Soybean Meal Aug 2016   376.60   -7.40   -1.93%

Soybean Meal Sep 2016   375.40   -7.60   -1.98%

 

Soybean Oil Jul 2016   30.99   -0.76   -2.39%

Soybean Oil Aug 2016   31.13   -0.77   -2.41%

Soybean Oil Sep 2016   31.27   -0.77   -2.40%

 

Corn Jul 2016   384.50   -2.75   -0.71%

Corn Sep 2016   389.00   -3.50   -0.89%

Corn Dec 2016   394.25   -3.50   -0.88%

Corn Mar 2017   401.75   -3.50   -0.86%

Corn May 2017   405.75   -3.50   -0.86%

 

Oats Jul 2016   209.00   +1.75   +0.84%

Oats Sep 2016   201.00   -4.75   -2.31%

Oats Dec 2016   205.75   -4.25   -2.02%

Oats Mar 2017   219.00   -4.00   -1.79%

Oats May 2017   219.00   -4.00   -1.79%

 

Wheat Jul 2016   454.75   +0.50   +0.11%

Wheat Sep 2016   465.00   -0.75   -0.16%

Wheat Dec 2016   484.75   -1.50   -0.31%

Wheat Mar 2017   502.75   -2.00   -0.40%

Wheat May 2017   513.00   -2.25   -0.44%

 

Minneapolis

Spring Wheat Jul 2016   517.75   -3.75   -0.72%

Spring Wheat Sep 2016   526.50   -4.50   -0.85%

Spring Wheat Dec 2016   541.50   -4.00   -0.73%

Spring Wheat Mar 2017   555.00   -3.25   -0.58%

Spring Wheat May 2017   562.50   -3.50   -0.62%

 

Kansas City

Hard Red Wheat Jul 2016   422.75   -5.00   -1.17%

Hard Red Wheat Sep 2016   441.00   -4.50   -1.01%

Hard Red Wheat Dec 2016   466.75   -4.00   -0.85%

Hard Red Wheat Mar 2017   483.25   -4.25   -0.87%

Hard Red Wheat May 2017   493.75   -4.00   -0.80%

 

Chicago livestock futures in US¢/pound

Live Cattle (P) Jun 2016   114.70   -2.05   -1.76%

Live Cattle (P) Aug 2016   110.87   -2.98   -2.62%

Live Cattle (P) Oct 2016   110.87   -2.76   -2.43%

 

Feeder Cattle (P) Aug 2016   139.45   -2.93   -2.06%

Feeder Cattle (P) Sep 2016   138.28   -2.54   -1.80%

Feeder Cattle (P) Oct 2016   136.80   -2.35   -1.69%

 

Lean Hogs (P) Jul 2016   84.05   -0.23   -0.27%

Lean Hogs (P) Aug 2016   84.98   -0.47   -0.55%

Lean Hogs (P) Oct 2016   71.95   -0.25   -0.35%

 

 

 

About the author

D'Arce McMillan

Markets editor, Saskatoon newsroom

Markets at a glance

explore

Stories from our other publications