Canola hangs tough during Monday selloff

Canola and oilseeds showed some toughness in the face of a big selloff in wheat Monday, marking only a slight price decline while Chicago wheat fell 21 cents, or about four percent.

“The oilseeds were quiet,” said P.I. Financial broker Ken Ball after trading closed.

“It didn’t seem to influence the oilseeds markets much.”

The selloff in wheat was mostly fund-induced. The short covering rally of last week seemed to have run its course, with the most recent Commitment of Traders Report showing that non commercial traders in the Chicago soft red wheat market had over the past two week greatly reduced what had been a heavy net short position.

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Commercials reduced their net long position last week.

“They’re all trying to get their money out and dumping the wheat market,” said Ball.

Also, there were forecasts for warmer, wetter weather for Ukraine and southern Russia which would help the  fall seeded wheat crop, which has been struggling. The trade is also focusing on slow U.S. wheat exports.

Canola  slipped only slightly, holding on more tightly than soybean oil or soybeans. Soybean meal was slightly firmer than canola.

Corn fell Monday, but nearby oats slightly rose, knowing something.

Cattle prices were limit-down Monday, succumbing to the high price of price and the weaker look of the commodity markets.

“The problem with cattle prices is that they are way too expensive compared to the rest of the commodity markets,” said Michael Seery of Seery Futures in a Barchart commentary.

Hog prices were lower too, sucked down by cattle.

U.S. stocks were caught in the bizarre Fed-gazing mode that has often become the main equity market driver.

The Friday U.S. jobs report, which shows far stronger than expected job gains, has spooked some parts of the equities market that are terrified of the Federal Reserve Bank beginning to raise interest rates.

With signs that the U.S. might be entering a period of hearty growth rather than the lackluster performance of the past five years, some investors are worried that the Fed will begin raising rates and therefore damaging returns on dividends and impairing corporate profitability when debt becomes more expensive to service.

An interest rate increase also reduces the desire of some investors to borrow money to finance stock purchases for speculation. Borrowed money will become more expensive.

That also affects futures trading, because much is done on margin and must be financed.

Contact ed.white@producer.com

Light crude oil nearby futures in New York were down 42 cents to US$43.87 per barrel.

The Canadian dollar at noon was US75.33 cents, up from 75.14 cents the previous trading day. The U.S. dollar at noon was C$1.3275.

Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2015   470.40   -1.90   -0.40%
Canola Jan 2016   477.80   -1.90   -0.40%
Canola Mar 2016   482.90   -2.60   -0.54%
Canola May 2016   485.00   -2.50   -0.51%
Canola Jul 2016   486.30   -2.00   -0.41%

Milling Wheat Dec 2015   235.00   -2.00   -0.84%
Milling Wheat Mar 2016   240.00   -1.00   -0.41%
Milling Wheat May 2016   244.00   -1.00   -0.41%

Durum Wheat Dec 2015   320.00   +5.00   +1.59%
Durum Wheat Mar 2016   325.00   +5.00   +1.56%

Durum Wheat May 2016   335.00   +5.00   +1.52%

Barley Dec 2015   188.50   unch   0.00%
Barley Mar 2016   190.50   unch   0.00%
Barley May 2016   191.50   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 2015   873.5   +2.25   +0.26%
Soybeans Jan 2016   866.25   -1   -0.12%
Soybeans Mar 2016   867.25   -2.25   -0.26%
Soybeans May 2016   872.25   -2.5   -0.29%
Soybeans Jul 2016   877.25   -3.25   -0.37%
Soybeans Aug 2016   877   -3.5   -0.40%

Soybean Meal Dec 2015   295   -0.7   -0.24%
Soybean Meal Jan 2016   294.5   -0.3   -0.10%
Soybean Meal Mar 2016   293.2   unch   0.00%

Soybean Oil Dec 2015   27.77   -0.27   -0.96%
Soybean Oil Jan 2016   28.05   -0.27   -0.95%
Soybean Oil Mar 2016   28.28   -0.25   -0.88%

Corn Dec 2015   366.75   -6.25   -1.68%
Corn Mar 2016   376   -5.75   -1.51%
Corn May 2016   382.5   -5.75   -1.48%
Corn Jul 2016   387.5   -6.25   -1.59%
Corn Sep 2016   389.25   -7.5   -1.89%

Oats Dec 2015   224   +0.25   +0.11%
Oats Mar 2016   224.75   unch   0.00%
Oats May 2016   226   +0.5   +0.22%

Oats Jul 2016   229   -1.25   -0.54%
Oats Sep 2016   232.25   -0.75   -0.32%

Wheat Dec 2015   501.75   -21.5   -4.11%
Wheat Mar 2016   505.5   -20   -3.81%
Wheat May 2016   509.75   -19.5   -3.68%
Wheat Jul 2016   510.75   -19.25   -3.63%
Wheat Sep 2016   518.75   -19   -3.53%

Minneapolis
Spring Wheat Dec 2015   504.25   -16.5   -3.17%
Spring Wheat Mar 2016   515.5   -13.25   -2.51%
Spring Wheat May 2016   526.25   -11.5   -2.14%
Spring Wheat Jul 2016   536.25   -10   -1.83%
Spring Wheat Sep 2016   546.75   -9.75   -1.75%

Kansas City
Hard Red Wheat Dec 2015   474   -16.25   -3.31%
Hard Red Wheat Mar 2016   489.75   -16   -3.16%
Hard Red Wheat May 2016   500.25   -16   -3.10%
Hard Red Wheat Jul 2016   510.75   -16   -3.04%
Hard Red Wheat Sep 2016   524.75   -16   -2.96%