Canola took another hit Friday, falling further beneath former support levels that many hoped would hold.
Now $470 per tonne seems like a distant memory and even $460 would be nice to get back above, after this week saw canola futures go from $480 to $454 per tonne for November.
The combination of China worries in the overall financial markets, China demand worries for canola specifically, and Statistics Canada’s finding that there are much bigger canola stockpiles than expected hammered down canola prices.
Now few buyers will be worried that the world is going to run out of canola in the next year.
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For the week ending August 23, Western Canadian feeder cattle markets traded $5 to $10 higher on average compared to seven days earlier. In some locations such as Lethbridge, larger packages of quality yearlings traded $10 to as much as $20/cwt higher.
Broker Errol Anderson of Pro Market in Calgary said after the sharp sell-off in canola futures, he wouldn’t be surprised to see a rebound next week.
“Where could it go? To $468? he mused.
But that will be a temporary recovery, he thinks, followed by a return to today’s low prices or lower still.
Right now there’s not much reason to believe canola needs to be more expensive.
“Is this the low of canola? Probably not.”
The main stock markets sold off after the main U.S. jobs report found that employers added 173,000 jobs in July, which was tens of thousands beneath analyst expectations.
That reinforces the notion that America’s economic recovery is weakening and a recession possible if China keeps weakening.
Crude oil futures weakened Friday after a wild week of ups and downs. Brent now sits at around $50 per barrel and West Texas Intermediate at $46.
Generally, crops have been one of the more stable commodity classes this week, with fundamental supply and demand factors still playing the dominant role in pricing. Canola only fell less than 10 cents Friday, and other crops were hardly changed at the close.
This is the Labour Day weekend, and during the summer months trade is often volatile and quixotic. Many traders, investors and fund managers are away from the markets while vacationing.
Most return the day after Labour Day and market watchers look closely at how they react in those first days of the fall season. While there has been much attention paid to and discussion about the summer’s wild markets, most seasoned market watchers are waiting to see what happens next week, when all the players return and things get real.
Light crude oil nearby futures in New York were down 70 cents to US$46.05 per barrel.
The Canadian dollar at noon was US75.34 cents, down from 75.76 cents the previous trading day. The U.S. dollar at noon was C$1.3273.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2015 454.50 -2.90 -0.63%
Canola Jan 2016 459.40 -4.00 -0.86%
Canola Mar 2016 463.50 -4.10 -0.88%
Canola May 2016 464.10 -4.00 -0.85%
Canola Jul 2016 464.80 -3.90 -0.83%
Milling Wheat Oct 2015 222.00 +1.00 +0.45%
Milling Wheat Dec 2015 222.00 +1.00 +0.45%
Milling Wheat Mar 2016 226.00 +1.00 +0.44%
Durum Wheat Oct 2015 335.00 unch 0.00%
Durum Wheat Dec 2015 335.00 unch 0.00%
Durum Wheat Mar 2016 340.00 unch 0.00%
Barley Oct 2015 184.00 unch 0.00%
Barley Dec 2015 184.00 unch 0.00%
Barley Mar 2016 186.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Sep 2015 877.25 -2.5 -0.28%
Soybeans Nov 2015 866.5 -3 -0.35%
Soybeans Mar 2016 871 -3.5 -0.40%
Soybeans May 2016 873 -3.5 -0.40%
Soybeans Jul 2016 876.25 -3.5 -0.40%
Soybean Meal Sep 2015 313.9 -2.6 -0.82%
Soybean Meal Oct 2015 308.1 -2 -0.64%
Soybean Meal Dec 2015 306.8 -1.4 -0.45%
Soybean Oil Sep 2015 26.44 -0.32 -1.20%
Soybean Oil Oct 2015 26.53 -0.32 -1.19%
Soybean Oil Dec 2015 26.73 -0.34 -1.26%
Corn Sep 2015 349.5 +1.75 +0.50%
Corn Dec 2015 363 +1.5 +0.41%
Corn Mar 2016 374.5 +1.5 +0.40%
Corn May 2016 381.5 +1.5 +0.39%
Corn Jul 2016 386.5 +1 +0.26%
Oats Sep 2015 223.25 +0.5 +0.22%
Oats Dec 2015 223.25 +0.5 +0.22%
Oats Mar 2016 222.5 -0.25 -0.11%
Oats May 2016 228 -0.25 -0.11%
Oats Jul 2016 229 -0.25 -0.11%
Wheat Sep 2015 457.75 +1.25 +0.27%
Wheat Dec 2015 467.75 +2.5 +0.54%
Wheat Mar 2016 476.25 +2.5 +0.53%
Wheat May 2016 482.25 +2.75 +0.57%
Wheat Jul 2016 486.75 +2.5 +0.52%
Minneapolis
Spring Wheat Sep 2015 486.25 +1.5 +0.31%
Spring Wheat Dec 2015 503.25 +3 +0.60%
Spring Wheat Mar 2016 519.25 +2.75 +0.53%
Spring Wheat May 2016 530.25 +3 +0.57%
Spring Wheat Jul 2016 541 +2.75 +0.51%
Kansas City
Hard Red Wheat Sep 2015 448.5 +7 +1.59%
Hard Red Wheat Dec 2015 474.75 +7 +1.50%
Hard Red Wheat Mar 2016 489 +7 +1.45%
Hard Red Wheat May 2016 498.5 +6.75 +1.37%
Hard Red Wheat Jul 2016 507.75 +6.5 +1.30%
