Canola follows soybean meal higher

Sometimes a mighty wind propels one commodity ahead and others get sucked along in the slipstream.

That is what mostly seems to have happened Monday in North American crop futures markets, as soybean meal tornadoed higher, dragging corn, soybeans, canola, wheat and oats higher.

“It was all meal,” said Ken Ball, a broker with P.I. Financial in Winnipeg.

“Meal, meal, meal, meal, meal, meal.”

Soybean meal futures rose almost eight percent as marketers scrambled to fill commitments they had made but couldn’t fulfill. Late harvest in the United States combined with super-tight old crop soybean meal supplies have led many commercials who were short the meal market to find they didn’t have the meal in hand that they had expected to have at the end of October.

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Commercial-driven buying triggered technical buying as a 200-day moving average was breached, giving futures room to run.

Even though soybean oil prices fell slightly, canola managed to rally almost three percent.

That was less than for soybeans, though, so canola’s recent relative weakness continues. Friday canola shed value after the explosion at the Yorkton, Sask., Louis Dreyfus crushing plant.

Soybeans are a much more heavily meal-based crop in terms of pricing. Canola’s meal content is relatively small, and even that book value can be discounted because of its thinner demand base.

“Getting that meal value out of canola just isn’t that easy,” Ball said.

The surge in canola futures took prices to a seven-week high, with short-covering helping explain some of the sudden strength.

Corn futures were also aided by the late harvest and by a growing feeling that the long selloff since spring might finally have turned for the medium-term.

Even though world wheat supplies are ample, North American wheat futures partook in Monday’s rally, rising a few cents.

The re-election of Brazilian president Dilma Rousseff is seen as likely to increase soybean production there, since she is seen as more likely to encourage inflation, and commodities like soybeans generally hold their value against inflation.

West Texas oil briefly traded below $80 a barrel, weighing on energy stocks at the Toronto Stock Exchange. The S&P/TSX composite index closed down 74.82 points, or 0.51 percent, at 14,469.

The Dow Jones industrial average rose 12.53 points, or 0.07 percent, to 16,817.94, the S&P 500 lost 2.95 points, or 0.15 percent, to 1,961.63 and the Nasdaq Composite added 2.22 points, or 0.05 percent, to 4,485.93.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014    422.70    +11.70    +2.85%
Canola Jan 2015    420.50    +9.10    +2.21%
Canola Mar 2015    422.80    +8.80    +2.13%

Canola May 2015    426.20    +9.10    +2.18%
Canola Jul 2015    427.60    +9.30    +2.22%

Milling Wheat Dec 2014    223.00    -2.00    -0.89%
Milling Wheat Mar 2015    229.00    -2.00    -0.87%
Milling Wheat May 2015    232.00    -2.00    -0.85%

Durum Wheat Dec 2014    356.50    unch    0.00%
Durum Wheat Mar 2015    357.50    unch    0.00%
Durum Wheat May 2015    357.50    unch    0.00%

Barley Dec 2014    137.00    unch    0.00%
Barley Mar 2015    140.00    unch    0.00%
Barley May 2015    140.00    unch    0.00%

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound

Chicago
Soybeans Nov 2014    1006    +28.5    +2.92%
Soybeans Jan 2015    1012.75    +29.5    +3.00%
Soybeans Mar 2015    1019.5    +29.5    +2.98%
Soybeans May 2015    1025.75    +29    +2.91%
Soybeans Jul 2015    1030.5    +28.25    +2.82%
Soybeans Aug 2015    1030    +27.25    +2.72%

Soybean Meal Dec 2014    376.8    +26.6    +7.60%
Soybean Meal Jan 2015    360.9    +22.1    +6.52%
Soybean Meal Mar 2015    345.4    +18    +5.50%

Soybean Oil Dec 2014    32.23    -0.16    -0.49%
Soybean Oil Jan 2015    32.47    -0.17    -0.52%
Soybean Oil Mar 2015    32.74    -0.16    -0.49%

Corn Dec 2014    363    +10    +2.83%
Corn Mar 2015    376.75    +10    +2.73%
Corn May 2015    385.5    +10.25    +2.73%
Corn Jul 2015    392.75    +10    +2.61%
Corn Sep 2015    399.75    +9.5    +2.43%

Oats Dec 2014    360.5    +8.75    +2.49%
Oats Mar 2015    345.75    +6    +1.77%

Oats May 2015    338    +5.5    +1.65%
Oats Jul 2015    330    +6.25    +1.93%
Oats Sep 2015    332.5    +7.5    +2.31%

Wheat Dec 2014    522.75    +5    +0.97%
Wheat Mar 2015    536.5    +5.5    +1.04%
Wheat May 2015    544    +5.25    +0.97%
Wheat Jul 2015    551.75    +5.5    +1.01%
Wheat Sep 2015    561.75    +6    +1.08%

Minneapolis
Spring Wheat Dec 2014    571.75    +4.75    +0.84%
Spring Wheat Mar 2015    582.25    +4.25    +0.74%
Spring Wheat May 2015    590.5    +4.75    +0.81%
Spring Wheat Jul 2015    598.5    +4.25    +0.72%
Spring Wheat Sep 2015    606.25    +4    +0.66%

Kansas City
Hard Red Wheat Dec 2014    594.75    +1    +0.17%
Hard Red Wheat Mar 2015    598.5    +2.25    +0.38%
Hard Red Wheat May 2015    598.5    +2.25    +0.38%
Hard Red Wheat Jul 2015    593    +2.5    +0.42%
Hard Red Wheat Sep 2015    603.75    +1.75    +0.29%

Light crude oil nearby futures in New York dropped 1 cent at $81.00 US per barrel.

The Canadian dollar at noon was 88.91 cents US, down from 89.18 cents the previous trading day. The U.S. dollar at noon was $1.1247 Cdn.