Canola makes modest gains

Tuesday was a day of price rises for all the main crops on North American futures exchanges, but canola didn’t gain ground on soybeans.

Soybean oil futures were the one weak part of the market, falling half a percent, and that likely held canola prices back, since it’s mostly valued by its oil content.

But some have been expecting to see canola regain ground on soybeans, and so far they haven’t seen it happen.

“It’s still lagging by quite a bit,” said Ken Ball of P.I. Financial in Winnipeg.

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“Canola had some catch-up to do but it didn’t really do it.”

Crop futures have recently been choppy, with sharp moves during daily sessions that seem to operate independently of news events.

“It’s very volatile, very erratic, but not being driven by anything significant,” said Ball.

Ball said some of the soybean strength, with futures rising 20 cents per bushel Tuesday, is mostly due to short-covering, so not a necessarily a bullish signal.

That might also explain why canola futures haven’t chased soybeans higher: market players don’t think the soybean rally will last.

“Canola traders are all expecting that the soy markets are going to come back down, so they’re not going to bother taking canola back up,” said Ball.

Dry conditions in Brazil and harvest delays in the U.S. are lending markets a bit of support, but those factors are generally considered minor.

An interesting feature of recent crop market action is the complete lack of linkage to what used to be called “outside markets,” such as other commodities and stock markets.

Oil has been steadily weakening, falling strongly in recent days, but crops have not followed those moves.

And stock markets took a beating last week, but even powerful equity market moves did not appear to be affecting crop futures movements.

At one time, both in the mid-2000s bull market and in the 2008-09 bubble expansion and popping, crops followed outside markets in almost lock-step, but there is no evidence of that now.

Winnipeg ICE Futures Canada dollars per tonne

Canola Nov 2014    406.10    +7.20    +1.80%
Canola Jan 2015    411.80    +6.60    +1.63%
Canola Mar 2015    419.00    +6.50    +1.58%
Canola May 2015    424.30    +6.40    +1.53%
Canola Jul 2015    427.50    +5.90    +1.40%

Milling Wheat Dec 2014    217.00    +3.00    +1.40%

Milling Wheat Mar 2015    226.00    +4.00    +1.80%
Milling Wheat May 2015    229.00    +3.00    +1.33%

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    117.50    unch    0.00%
Barley Mar 2015    120.50    unch    0.00%
Barley May 2015    120.50    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 2014    964.75    +19.5    +2.06%
Soybeans Jan 2015    973.25    +20    +2.10%
Soybeans Mar 2015    981.75    +20    +2.08%
Soybeans May 2015    990.25    +20.25    +2.09%
Soybeans Jul 2015    997    +20.25    +2.07%
Soybeans Aug 2015    999    +20    +2.04%

Soybean Meal Dec 2014    324    +6.1    +1.92%
Soybean Meal Jan 2015    320.9    +6.2    +1.97%
Soybean Meal Mar 2015    317.6    +7    +2.25%

Soybean Oil Dec 2014    32.87    -0.17    -0.51%
Soybean Oil Jan 2015    33.15    -0.17    -0.51%
Soybean Oil Mar 2015    33.42    -0.13    -0.39%

Corn Dec 2014    357    +11    +3.18%
Corn Mar 2015    370    +11.5    +3.21%
Corn May 2015    379    +11.5    +3.13%
Corn Jul 2015    386.25    +11    +2.93%
Corn Sep 2015    393.25    +11.25    +2.95%

Oats Dec 2014    345.25    +0.25    +0.07%
Oats Mar 2015    329.75    +1.75    +0.53%
Oats May 2015    323.5    +1    +0.31%
Oats Jul 2015    316.75    +4.25    +1.36%
Oats Sep 2015    320.5    unch    0.00%

Wheat Dec 2014    509.25    +4    +0.79%
Wheat Mar 2015    521.25    +4.25    +0.82%
Wheat May 2015    528    +5.5    +1.05%

Wheat Jul 2015    535.75    +6    +1.13%
Wheat Sep 2015    546.25    +5.5    +1.02%

Minneapolis
Spring Wheat Dec 2014    564.25    +5.5    +0.98%
Spring Wheat Mar 2015    572.75    +5.25    +0.93%
Spring Wheat May 2015    581.75    +4.5    +0.78%
Spring Wheat Jul 2015    590.5    +3.25    +0.55%
Spring Wheat Sep 2015    600.25    +3.5    +0.59%

Kansas City
Hard Red Wheat Dec 2014    590.25    +6    +1.03%
Hard Red Wheat Mar 2015    591.5    +6    +1.02%
Hard Red Wheat May 2015    589.75    +5    +0.86%
Hard Red Wheat Jul 2015    583.5    +4.75    +0.82%
Hard Red Wheat Sep 2015    595    +3.5    +0.59%

Light crude oil nearby futures in New York dropped $3.90 at $81.84 US per barrel.

The Canadian dollar at noon was 89 cents US, down from 89.47 cents the previous trading day. The U.S. dollar at noon was $1.1236 Cdn.