Canola took another thumping Tuesday, continuing its recent weakness, but don’t blame the poor crop: it’s being dragged down by bad friends.
Chronic weakness in soybean oil, the trendsetter for North American vegetable oil prices, is dragging canola, soybeans and other vegetable oil crops lower.
“The bean oil is just a lead weight right now,” said Ken Ball, a broker with P.I. Financial.
“It is just going down like a rock.”
Canola fell $10.80 per tonne on both the November and January contracts, to $474.70 and $473.80. The more than two percent value loss was out-stunk by soybean oil, which fell more than 2.5 percent.
Read Also
U.S. grains: Corn backs away from gains at close
Chicago | Reuters — U.S. corn futures climbed to a 6-1/2 week high on Friday on short covering ahead of…
Soybean complex prices are being pressured by building stocks of soybean oil, which is a byproduct of the hectic pace of U.S. soybean crushers, who have been making great margins selling soybean meal. The oil, which has a lower percentage value of the soybean than canola, is bringing less, but the meal gains have more than compensated.
Palm oil prices are also weak, with big stocks and big crops relieving any supply worries.
Ball thinks some of the canola selling today might have been stop-loss trading as well as a clearing of the decks before Statistics Canada’s Friday crop progress report and projection.
The StatsCan survey was done about three weeks before the Aug. 21 report is due to be released and growing conditions have substantially changed since that period, but Ball said the report could still rock the markets.
Since everyone already expects the StatsCan number to be too low, considering all the rain that has saved and boosted crops across the Prairies in the past three weeks, the StatsCan number is being seen as a low baseline. If that baseline is higher than expected, analysts will perhaps boost their own estimates even higher than they are now using.
“If it pops out a number like 13 and a half to 14 (million tonnes of canola), everybody’s going to add another million tonnes to it,” said Ball.
A 14 million tonne crop wouldn’t create big stockpiles of canola, but it would alleviate the concerns of many that there won’t be enough canola next year.
ed.white@producer.com
Light crude oil nearby futures in New York were up 75 cents to US$42.62 per barrel.
The Canadian dollar at noon was US76.49 cents, down from 76.39 cents the previous trading day. The U.S. dollar at noon was C$1.3073.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2015 474.70 -10.80 -2.22%
Canola Jan 2016 473.80 -10.80 -2.23%
Canola Mar 2016 472.70 -10.60 -2.19%
Canola May 2016 469.70 -10.10 -2.11%
Milling Wheat Oct 2015 226.00 -2.00 -0.88%
Milling Wheat Dec 2015 226.00 -2.00 -0.88%
Milling Wheat Mar 2016 230.00 -2.00 -0.86%
Durum Wheat Oct 2015 355.00 unch 0.00%
Durum Wheat Dec 2015 360.00 unch 0.00%
Durum Wheat Mar 2016 365.00 unch 0.00%
Barley Oct 2015 203.60 -1.50 -0.73%
Barley Dec 2015 203.60 -1.50 -0.73%
Barley Mar 2016 205.60 -1.50 -0.72%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Sep 2015 913.25 -13.75 -1.48%
Soybeans Nov 2015 904.25 -12.75 -1.39%
Soybeans Jan 2016 910 -12.25 -1.33%
Soybeans Mar 2016 909.75 -12.25 -1.33%
Soybeans May 2016 909.5 -11.5 -1.25%
Soybeans Jul 2016 913.25 -11.25 -1.22%
Soybean Meal Sep 2015 324.6 -0.8 -0.25%
Soybean Meal Oct 2015 316 -1.7 -0.54%
Soybean Meal Dec 2015 312.9 -1.8 -0.57%
Soybean Oil Sep 2015 28.32 -0.74 -2.55%
Soybean Oil Oct 2015 28.43 -0.74 -2.54%
Soybean Oil Dec 2015 28.62 -0.75 -2.55%
Corn Sep 2015 366.25 +3 +0.83%
Corn Dec 2015 377.25 +2.75 +0.73%
Corn Mar 2016 388.75 +2.75 +0.71%
Corn Jul 2016 399.25 +2.25 +0.57%
Oats Sep 2015 225 +1.75 +0.78%
Oats Dec 2015 237.5 +1.5 +0.64%
Oats Mar 2016 246 +2.25 +0.92%
Oats May 2016 253.5 +2.25 +0.90%
Oats Jul 2016 254.5 +2.25 +0.89%
Wheat Sep 2015 494.25 -6.25 -1.25%
Wheat Dec 2015 498.75 -5.75 -1.14%
Wheat Mar 2016 503.5 -6.25 -1.23%
Wheat May 2016 506.5 -6.75 -1.32%
Wheat Jul 2016 510 -6.25 -1.21%
Minneapolis
Spring Wheat Sep 2015 508.25 -4.75 -0.93%
Spring Wheat Dec 2015 523.25 -5.25 -0.99%
Spring Wheat Mar 2016 539.5 -4.75 -0.87%
Spring Wheat May 2016 550 -4 -0.72%
Spring Wheat Jul 2016 560.25 -3.5 -0.62%
Kansas City
Hard Red Wheat Sep 2015 476 -6.25 -1.30%
Hard Red Wheat Dec 2015 495.5 -6.75 -1.34%
Hard Red Wheat Mar 2016 509.25 -7 -1.36%
Hard Red Wheat May 2016 518.75 -7.5 -1.43%
Hard Red Wheat Jul 2016 527.75 -7.75 -1.45%
