Canola was one of the beneficiaries of the Monday rebound in the commodity markets, but not nearly as much as wheat and corn prices.
July 2011 futures rose $8.10 per tonne to $568.90 and new crop November rose $6.60 to $563.30 in Monday trading.
Canola and soybean futures rose Monday, but cereal grain prices were far stronger. Spring wheat futures contracts shot up about 40 cents per bushel in Chicago, with corn futures rising 21 cents per bu. for old crop and 17 cents for new crop. In proportional value terms, the rise in wheat prices was more than five times that of canola.
Cereal grain prices were given a powerful push by wheat production worries continuing in a number of regions and lingering production concerns in the corn belt, which have many expecting soybean acreage to increase if corn can’t be planted in time.
Market analysts are divided on the nature of Monday’s cross-commodity rebound and Friday’s end of the commodity slump. Some feel the precipitous slide in almost all commodity prices, especially the key industrial/economic-related copper and crude oil prices, represents an end to the commodity bull market that is more than a year old now.
The slump was sparked by a silver sell-off that was triggered by new CME margin requirements on silver futures contracts, but spilled over into crude oil, copper and almost all other commodities as investors suddenly faced up to U.S., European and Chinese economic worries that had been floating in front of the markets for months.
In the week-long slump, June Brent crude oil fell from $125 per barrel to a low of slightly more than $105 before recovering by late Monday to $116. Copper fell in the same period from almost $4.30 to a low of about $3.95 before recovering late Monday to more than $4.05.
Many analysts feel that the highs of a few weeks ago are likely the top of the market and that prices of most commodities are now more likely to weaken than strengthen.
A smaller contingent of analysts feels that the recent slump was merely a correction after a long march uphill, but that the commodity story still makes sense and that higher highs are still reasonable to expect.
The U.S. dollar fell against the Canadian dollar Monday, lending support to commodity prices. European currencies also fell on fears of Greek, Irish, Portuguese and other debt situations.
