Canola futures rise as U.S. dollar falls

Crop markets jumped higher on Thursday spurred mostly by a decline in the American dollar, technical buying and short covering.

January canola closed at $475.30 up $3.90 or 0.83 percent, its fourth consecutive daily gain.

The U.S. dollar index, which measured the greenback against a basket of currencies, was down about two percent. Earlier in the week the index had hit a 12-year high.

It fell today on action by the European Central Bank. The trade had expected the ECB to take aggressive action to stimulate the European economy. A reduction in key lending rates would weaken the Euro.

However, the actions taken fell short of expectations and so the Euro rose against the U.S. buck.

And a falling U.S. dollar raises U.S. crop prices.

The weaker greenback will likely be short lived. The Federal Reserve is expected to increase interest rates later this month.

The crop rally happened despite disappointing weekly U.S. export sales in soybeans and corn. Wheat sales were within the range of trade expectations.

The Canadian trade is cautious ahead of Friday’s Statistics Canada production report.

The mid point of expectations for the canola is about 15.5-15.6 million tonnes, about 1.2 million tonnes ahead of the September survey released in October.

However, exports and domestic crush are running well ahead of official forecasts so a bigger crop estimate does not necessarily mean year end stocks will increase.

Today’s rally helped soy oil break above its 200-day moving average for the first time since July 14.

The currency issue helped lift wheat. Funds hold a large net short position in wheat and so when prices start to rise momentum can grow as the fund start to cover their shorts.

Chicago and Kansas December wheat rose more than two percent, but Minneapolis, which has not been falling as hard as Chicago in recent days, today climbed only 0.43 percent

Major American stock indexes were down about 1.5 per cent in afternoon trade, and the TSX composite was down about one percent. Traders reacted negatively to the ECB’s modest actions regarding economic stimulation.

Light crude oil nearby futures in New York were up $1.14 to US$41.08 per barrel, supported by the weaker U.S. dollar.

The Canadian dollar at noon was US74.66 cents, down from 74.85 cents the previous trading day. The U.S. dollar at noon was C$1.3394.

Winnipeg ICE Futures Canada dollars per tonne

Canola Jan 2016 475.30 +3.90 +0.83%

Canola Mar 2016 483.00 +3.50 +0.73%

Canola May 2016 489.80 +3.00 +0.62%

Canola Jul 2016 494.30 +2.60 +0.53%

Canola Nov 2016 480.10 +3.50 +0.73%

Milling Wheat Dec 2015 237.00 +1.00 +0.42%

Milling Wheat Mar 2016 239.00 +1.00 +0.42%

Milling Wheat May 2016 242.00 +1.00 +0.41%

Durum Wheat Dec 2015 320.00 unch 0.00%

Durum Wheat Mar 2016 325.00 unch 0.00%

Durum Wheat May 2016 335.00 unch 0.00%

Barley Dec 2015 189.00 unch 0.00%

Barley Mar 2016 191.00 unch 0.00%

Barley May 2016 197.00 unch 0.00%

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

Chicago

Soybeans Jan 2016 897.5 +5.25 +0.59%

Soybeans Mar 2016 900.25 +5.25 +0.59%

Soybeans May 2016 906.25 +5 +0.55%

Soybeans Jul 2016 913 +5.5 +0.61%

Soybeans Aug 2016 914.5 +5.25 +0.58%

Soybeans Sep 2016 913.5 +5.25 +0.58%

Soybean Meal Dec 2015 287.1 +0.8 +0.28%

Soybean Meal Jan 2016 287.4 +0.7 +0.24%

Soybean Meal Mar 2016 289.4 +0.5 +0.17%

Soybean Oil Dec 2015 30.59 +0.32 +1.06%

Soybean Oil Jan 2016 30.87 +0.3 +0.98%

Soybean Oil Mar 2016 31.1 +0.29 +0.94%

Corn Dec 2015 370.25 +6.25 +1.72%

Corn Mar 2016 377 +6.75 +1.82%

Corn May 2016 382.75 +6.75 +1.80%

Corn Jul 2016 388 +6.5 +1.70%

Corn Sep 2016 391.75 +6.25 +1.62%

Oats Dec 2015 265 +0.75 +0.28%

Oats Mar 2016 239.75 +4.5 +1.91%

Oats May 2016 235.5 +3.5 +1.51%

Oats Jul 2016 235.5 +3.25 +1.40%

Oats Sep 2016 233.5 +1 +0.43%

Wheat Dec 2015 464.75 +12.5 +2.76%

Wheat Mar 2016 478.75 +11.5 +2.46%

Wheat May 2016 486 +11.75 +2.48%

Wheat Jul 2016 492.75 +11 +2.28%

Wheat Sep 2016 503 +10.5 +2.13%

Minneapolis

Spring Wheat Dec 2015 522 +2.25 +0.43%

Spring Wheat Mar 2016 512 +3.25 +0.64%

Spring Wheat May 2016 519.25 +3.5 +0.68%

Spring Wheat Jul 2016 527.75 +3 +0.57%

Spring Wheat Sep 2016 538.25 +3.5 +0.65%

Kansas City

Hard Red Wheat Dec 2015 458.75 +10.5 +2.34%

Hard Red Wheat Mar 2016 476.5 +10.5 +2.25%

Hard Red Wheat May 2016 487.25 +10.5 +2.20%

Hard Red Wheat Jul 2016 497.25 +10 +2.05%

Hard Red Wheat Sep 2016 511.25 +9.75 +1.94%

Your reading list