Canola falls sharply

Canola and the rest of the crops complex fell sharply Thursday, failing to take flight from soaring global equity markets and failing to be held tight by a flat commodity complex.

Analysts are debating whether the recent price weakness and yo-yoing action of the crops futures complex is a sign of a peak having been met and demand disintegrating, or just a technical correction in a surviving bull market.

Canola fell $15.20 per tonne to $601.50 for the November contract and by $15.30 to $603.60 for the January. That leaves canola well below $14 per bushel at $13.64 for November, a disappointment after Wednesday’s recovery rally took it back to the $14 area.

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Canola’s performance paralleled soybeans in Chicago, which closed down 48 cents to $15.67 for the November contract.

All the other futures-traded crops in North America also fell Thursday, with Chicago corn 9-13 cents per bushel, spring wheat falling 21-22 cents per bushel and oats falling three cents.

The U.S. Midwest drought has inspired frenetic action in in the Chicago markets in the past month, with volatile moves common. A three day sell-off ended yesterday, one that was tightly attached to the global equity and commodity sell-off, but today’s crops slump was in contrast to a slightly positive day for most commodities and a rip-roaringly good day for equities around the world.

The failure of crops to continue to recover has increased anxieties amongst farmers and traders that the peak might be in for the crop rally. All eyes are on the U.S. soybean crop now, which is in its crucial yield-setting stage and still in drought conditions.

The equity market europhia Thursday followed statements by the European Central Bank head that everything would be done to save the Euro.

There was no word on whether the tide will be forbidden from coming in as well.

Winnipeg (per tonne)

Canola Nov 12 $601.50, down $15.20 -2.46%

Canola Jan 13 $603.60, down $15.30 -2.47%

Canola Mar 13 $605.20, down $14.50 -2.34%

Canola May 13 $598.20, down $15.30 -2.49%

Western Barley Oct 12 $257.00, unchanged

Western Barley Dec 12 $262.00, unchanged

Milling Wheat Oct 12 $329.00, down $1.00 -0.30%

Milling Wheat Dec 12 $336.50, down $1.00 -0.30%

Milling Wheat Mar 13 $346.50, down $1.00 -0.29%