Canola defies trend by gaining ground

In a sea of red ink, canola prices were a verdant aberration Wednesday, recording gains on a day when virtually every other crop lost ground.

November Winnipeg canola futures gained $7.60 to reach $641 per tonne, or up 17 cents to $14.54 per bushel, and January rose $7.50 to $644.70. In Chicago, both November and January soybean futures fell about 20 cents to about $17.46 per bu. Chicago corn and wheat also fell, as did other wheat contracts.

But some traders said Wednesday’s canola gain was simply a follow-on to the big losses of Tuesday.

“It’s nothing,” said Ken Ball of Union Securities.

“This is maybe half of what it lost to the U.S. market yesterday.”

Canola prices have recently suffered compared to soybean prices, with part of the weakness due to the special circumstances around the drought U.S. soybean crop.

But some traders think commercial users are deliberately trying to keep canola relatively cheap.

In Western Canada, canola is moving toward elevators in many areas, and this also reduces the ability for canola prices to rise, some say.

With U.S. soybeans, traders are still being moved mostly by reports of poor yields, so harvest pressure is not a big factor south of the border.

Generally it was a dour but not dark day in world markets, with anxieties over global growth overshadowing small elements of good news. Federal Express said its earning were being weakened by a slowdown in package deliveries around the world, reigniting fears that the world is easing into a new recession.

Traders and analysts discussed yet again the likelihood of Ben Bernanke introducing another round of quantitative easing, while everyone awaited the European Central Bank boss’s announcement on how he’s going to paper over the critical debt servicing problems of Spain and Italy with a euroversion of quantitative easing.

Equity markets were cheered by Facebook founder Mark Zuckerberg’s announcement that he would not sell any of his shares for a year at least, and the company said it would launch a share buyback program. With Facebook having been the stink bomb stock the summer, down about 50 percent from its initial public offering price, the company is unlikely to find a dearth of its own stock to buy.

The markets generally have a tremulous feeling, as is common in early September, as traders, analysts, economists and executives return from their summer vacations and assess the state of the market. On top of the world’s debt problems, the U.S. election is beginning to consume much attention, so many expect an exciting time in the markets leading up to November.

Winnipeg (per tonne)

Canola Nov 12    $641.00, up $7.60    +1.20%

Canola Jan 13    $644.70, up $7.50    +1.18%

Canola Mar 13    $646.10, up $9.70    +1.52%

Canola May 13    $634.00, up $9.30    +1.49%

Milling Wheat Oct 12      $294.00, down $4.60    -1.54%

Milling Wheat Dec 12     $301.50, down $4.60    -1.50%

Milling Wheat Mar 13    $311.00, down $4.60    -1.46%

Durum Wheat Oct 12      $300.60, unchanged

Durum Wheat Dec 12     $305.10, unchanged

Durum Wheat Mar 13    $311.70, unchanged

Barley Oct 12    $264.50, unchanged

Barley Dec 12    $269.50, unchanged

Barley Mar 13    $272.50, unchanged

Chicago (per bushel)

Soybeans (P) Sep 12    $17.4800, down 23.00 cents    -1.30%

Soybeans (P) Nov 12    $17.4750, down 20.75

Soybeans (P) Jan 13    $17.4625, down 20.00    -1.13%

Soybeans (P) Mar 13    $16.9450, down 17.50    -1.02%

Corn (P) Sep 12     $7.8975, down 17.25    -2.14%

Corn (P) Dec 12     $7.9075, down 14.25    -1.77%

Corn (P) Mar 13    $7.9475, down 13.00    -1.61%

Oats (P) Sep 12      $3.8100, down 5.25    -1.36%

Oats (P) Dec 12      $3.8700, down 8.25    -2.09%

Oats (P) Mar 13     $3.8575, down 8.75    -2.22%

Minneapolis (per bushel)

Spring Wheat Sep 12      $9.1350, down 15.25 cents    -1.64%

Spring Wheat Dec 12     $9.2975, down 19.00    -2.00%

Spring Wheat Mar 13    $9.3950, down 18.25    -1.91%

Spring Wheat May 13    $9.4650, down 18.00    -1.87%

The previous day’s best canola basis was $20.79 under the November contract according to ICE Futures Canada in Winnipeg.

Light crude oil nearby futures in New York rose 6 cents at $95.36 US per barrel.

The Canadian dollar at noon was $1.0099 US, down from $1.0139 the previous trading day. The U.S. dollar at noon was 99.02 cents Cdn.

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