Canola falls beneath former support levels

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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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 Jan 2016   869.75   -3.75   -0.43%
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%