Canola followed soybeans lower Friday as the crop futures markets moved out of an odd period of calm that prevailed through much of the week.
November canola futures fell $6.90 per tonne to $480.10 and January fell $6.60 to $490.30.On the Week, Canola gain $2.10.
On the day soybeans fell 18 to 21 cents per bushel depending on the contract. Corn fell too, but only about five cents per bu.
Wheat was the odd man out again, reasserting its recent strength versus corn and soybeans, with a rise in all three main wheat futures categories. December spring wheat rose slightly to $7.54 3/4 per bu. despite the declines in corn and soybeans.
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Chicago Board of Trade soybean futures hit their highest level in more than a week on Thursday as technical buying helped the market recover from a three-month low reached on Monday, analysts said.
“The wheat market, to me, is getting ahead of itself,” said Errol Anderson of Pro Market in Calgary.
Wheat prices rallied in recent weeks before consolidating at present levels, causing many traders to suspect wheat was topping. The move Friday returned wheat to the higher reaches of its recent consolidation, but did not rise above it.
The strength in wheat has been attributed to a combination of heavy export sales from the U.S. weather damage in Argentina’s crop and poor seeding prospects in Ukraine and Eastern European winter wheat areas.
But the situation in corn and soybeans has been negative for weeks. After the incredible August rally, September saw a steady slide in soybean prices as worries about poor yields lessened and October has seen a slight recovery lost as Friday’s price drop returns soybeans to levels they held through midsummer.
Corn futures are simply ugly compared to recent history, with three-year lows being reached Friday at $4.33 per bushel for the December futures contract. In mid-June the same contract traded for $5.70.
While most of the move in canola is attributable to weakness in global vegetable oil crops such as U.S. soybeans, canola prices are experiencing their own downward pressure from the market belief that Prairie farmers have a large crop and will have to work hard all winter to move it.
But commercial consumption of canola has been chewing through the crop, with 151,795 tonnes processed by Canadian crushers in the week ended October 9, a 3.3 percent improvement on the previous week, according to the Canadian Oilseed Processors Association.
So far canola crush is well behind year-ago levels, at a total of less than 1.1 million tonnes now compared to more than 1.3 million tonnes at this time last year, but the late crop is mostly responsible for that. Capacity utilization was actually higher this past week compared to the same week last year, with 88.6 percent of crushing capacity being employed now versus 85.1 percent then.
During the week the crop futures markets had been disturbingly silent to many traders, as the total lack of fresh U.S. Department of Agriculture information caused traders to be cautious. Many had predicted volatility because of the dearth of official government data, but the opposite has been the case.
However, Anderson said the drops in soybeans and corn may presage an ugly week to come, as the markets finally left their holding pattern.
“I think the grains were kind of at a standstill just because of the lack of USDA information . . . but the market might turn volatile next week because the market might say: ‘Hey – we’ve got move on it, get over it,’” said Anderson.
Corn’s new low and soybean prices dropping below the 200 day moving average on some charts mean bearishness could assume supremacy following Canadian Thanksgiving.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 13 480.1 -6.90 -1.42%
Canola Jan 14 490.3 -6.60 -1.33%
Canola Mar 14 497.8 -6.60 -1.31%
Canola May 14 504.5 -6.20 -1.21%
Canola Jul 14 510.3 -5.50 -1.07%
Milling Wheat Oct 13 237 +2.00 +0.85%
Milling Wheat Dec 13 241 +2.00 +0.84%
Milling Wheat Mar 14 245 unch 0.00%
Durum Wheat Oct 13 243 unch 0.00%
Durum Wheat Dec 13 247 unch 0.00%
Durum Wheat Mar 14 253 unch 0.00%
Barley Oct 13 149 unch 0.00%
Barley Dec 13 152 unch 0.00%
Barley Mar 14 154 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Nov 13 1266.75 -21.25 -1.65%
Soybeans Jan 14 1266.25 -19.25 -1.50%
Soybeans Mar 14 1254 -18.50 -1.45%
Soybeans May 14 1239.5 -15.50 -1.24%
Soybeans Jul 14 1235 -16.50 -1.32%
Soybean Meal Oct 13 422 -2.4 -0.57%
Soybean Meal Jan 14 400.9 -5.00 -1.23%
Soybean Oil Oct 13 40.11 -0.93 -2.27%
Soybean Oil Dec 13 40.28 -0.94 -2.28%
Soybean Oil Jan 14 40.61 -0.92 -2.22%
Corn Dec 13 433.25 -5.00 -1.14%
Corn Mar 14 446.25 -4.75 -1.05%
Corn May 14 454.5 -5.00 -1.09%
Corn Jul 14 462 -5.00 -1.07%
Corn Sep 14 468.25 -4.75 -1.00%
Oats Dec 13 316.75 -3.50 -1.09%
Oats Mar 14 304 -3.50 -1.14%
Oats May 14 302 -4.75 -1.55%
Oats Jul 14 295.75 -4.75 -1.58%
Oats Sep 14 295.75 -5.25 -1.74%
Wheat Dec 13 692.25 +6.75 +0.98%
Wheat Mar 14 701 +5.75 +0.83%
Wheat May 14 702.75 +4.00 +0.57%
Wheat Jul 14 692.5 +1.75 +0.25%
Wheat Sep 14 698.75 +2.50 +0.36%
Minneapolis
Spring Wheat Dec 13 754.75 +3.75 +0.50%
Spring Wheat Mar 14 764 +3.25 +0.43%
Spring Wheat May 14 766.25 +1.00 +0.13%
Spring Wheat Jul 14 768.5 +1.00 +0.13%
Spring Wheat Sep 14 768.5 -0.50 -0.07%
Kansas City
KCBT Red Wheat Dec 13 760.25 +4.75 +0.63%
KCBT Red Wheat May 14 756 +2.00 +0.27%
KCBT Red Wheat Jul 14 737 -1.50 -0.20%
KCBT Red Wheat Sep 14 744.5 -1.50 -0.20%
Light crude oil nearby futures in New York dropped 99 cents at $102.02 US per barrel.
The Canadian dollar at noon was 96.29 cents US, down from 96.31 cents the previous trading day. The U.S. dollar at noon was $1.0385 Cdn.
Investors were nervous during the week about the U.S. political deadlock over the federal budget and debt ceiling but stocks climbed on signs of a late week compromise. Weaker gold and fertilizer company shares hurt the Toronto market. For the week, the TSX composite rose one percent, the Dow climbed 1.1 percent, the S&P 500 rose 0.7 percent and the Nasdaq fell 0.4 percent.
