Canola closes up slightly, market volatility remains

The week ended with canola and the other crop commodities continuing to draw their gruesome sawtooth smiles across the throat of the recent rally, not revealing which way the head will fall when it settles on a direction: up or down.

Friday saw an upslash of higher prices through the day, with Winnipeg ICE canola futures ending up $6.40 to $607.90 for November and up $6.60 to $610.20 for January.

That is $13.79 per bushel for November and $13.84 for January.

That leaves canola still deeply discounted to soybeans, which are more than $16 per bushel for November and are $15.91 for January. Generally canola is a more valuable crop per bushel because it has double the oil content of soybeans and the meal component – used for feed – is much less valuable.

But in volatile times like now, with a drought robbing American farmers of the feedgrains they need for feeding cattle and pigs, the protein component of soybeans becomes a premium product and canola is left to take up the rear.

Each day this week had seen a dramatic move one way or the other, sometimes both directions sharply in a single day, but Friday’s strong move higher was steady and not a wild ride.

This week has seen a setback for the historical rally that has swept crop markets in the past month. Once $17 soybeans and $8 corn were established, the market hammered them down. A raucous debate has raged over whether the falling back at that levels reveals a resistance point that won’t be broken, or simply a consolidation period before the next leg higher.

Some say soybeans are losing yield by the day and the condition is getting worse and prices need to march higher to ration demand.

Others say $16 and $17 prices are doing the job already of killing demand. The past week’s action of alternating strong up and down days did not clarify the situation.

A general mood of cheer and goodwill swept world markets outside of agriculture Friday again, following the cheerfest Thursday, taking stocks, commodities and grains higher as investors around the globe chose to believe the calming words of Eurozone leaders that they’d keep doing whatever they thought might work until the Euro survived.

Since many analysts think the Euro is soon to be dead, the repeated doses of relief might seem surprising after the string of failures Eurozone bosses have wrought, but humanity can only take so much woe and occasionally needs relief, even if it really doesn’t believe the tale.

Anyway, the Olympics have just started and perhaps the markets have chosen to have a truce for the duration. Why not, world? You’ve earned it.

Well, maybe not Greece, but most others have the right to party.

Winnipeg (per tonne)

Canola Nov 12    $607.90, up $6.40    +1.06%

Canola Jan 13    $610.20, up $6.60    +1.09%

Canola Mar 13    $612.00, up $6.80    +1.12%

Canola May 13    $604.40, up $6.20    +1.04%

Western Barley Oct 12    $257.00, unchanged

Western Barley Dec 12    $262.00, unchanged

Milling Wheat Oct 12      $327.50, down $1.50     -0.46%

Milling Wheat Dec 12     $335.00, down $1.50     -0.45%

Milling Wheat Mar 13    $345.00, down $1.50     -0.43%

Durum Wheat Oct 12      $330.40, unchanged

Durum Wheat Dec 12     $334.90, unchanged

Durum Wheat Mar 13    $341.50, unchanged

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    $16.8425, up 28.50 cents    +1.72%

Soybeans (P) Sep 12    $16.2775, up 31.25

Soybeans (P) Nov 12    $16.0175, up 34.25

Soybeans (P) Jan 13    $15.9125, up 36.25

Corn (P) Sep 12     $7.9850, up 17.25

Corn (P) Dec 12     $7.9325, up 17.00

Corn (P) Mar 13    $7.8750, up 14.25    +1.84%

Oats (P) Sep 12      $3.7700, up 7.50     +2.03%

Oats (P) Dec 12      $3.7975, up 7.00     +1.88%

Oats (P) Mar 13     $3.8450, up 7.00     +1.85%

Minneapolis (per bushel)

Spring Wheat Sep 12      $9.7200, up 4.25 cents    +0.44%

Spring Wheat Dec 12     $9.7850, up 11.75    +1.22%

Spring Wheat Mar 13    $9.8300, up 15.25    +1.58%

Spring Wheat May 13    $9.8500, up 13.50    +1.39%

The previous day’s best canola basis was $1 under the November contract according to ICE Futures Canada in Winnipeg.

Light crude oil nearby futures in New York rose 74 cents at $90.13 US per barrel.

The Canadian dollar at noon was 99.40 cents US, up from 99.00 cents the previous trading day. The U.S. dollar at noon was $1.0060 Cdn.

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