Election jitters helped keep canola from slipping much Monday.
North American crop futures ended up in the red across the board, but canola was almost the strongest of the lot, slipping only slightly in nominal terms.
However, the weakness of soybean oil, which fell more than 1.6 percent, still helped take canola down a peg, while the slump in the Canadian dollar helped disguise the weakness.
“There are a lot of traders taking profit on the Canadian dollar ahead of the election results,” said Ken Ball of P.I. Financial in Winnipeg.
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Currency speculators don’t like political risks to their positions, especially if those risks are hard to assess.
The market reaction to the Canadian election result is hard to predict because there could be 1) a Liberal minority government; 2) a Liberal majority; 3) a Conservative minority; 4) another result no one has thought about.
Because of that unpredictability, many who have had skin in the loonie game have taken it back.
It also encourages canola market speculators to become cautious because currency fluctuations play a big role in canola values, with some investors using canola as a surrogate for the loonie since other futures are denominated in U.S. dollars.
The weakness in U.S. crop futures is due in part to generally good production news around the world. The U.S. corn and soybean harvest are going well and beneficial rains have hit many winter wheat areas around the world.
Rain is forecast for Brazil, something that would alleviate much market anxiety.
Since good production news means bigger crops likely coming, the pressure on prices is of the downward sort.
“The news has all of a sudden swung all negative (for prices),” said Ball.
Big grain stocks and relatively weak world demand suggest U.S. crops will be hard to move this winter, pressuring prices.
There is still much harvest pressure on North American crop markets.
Even with recent hot, dry weather Australia is expected by some to have an about 24 million tonne wheat crop, which is a bit smaller than previously forecasted.
Contact ed.white@producer.com
Light crude oil nearby futures in New York were down $1.37 to US$45.89 per barrel.
The Canadian dollar at noon was US76.93 cents, down from 77.32 cents the previous trading day. The U.S. dollar at noon was C$1.2998.
Winnipeg ICE Futures Canada dollars per tonne
Canola Nov 2015 471.20 -1.40 -0.30%
Canola Jan 2016 476.20 -0.90 -0.19%
Canola Mar 2016 478.90 -0.90 -0.19%
Canola May 2016 479.60 -0.90 -0.19%
Canola Jul 2016 479.20 -0.80 -0.17%
Milling Wheat Dec 2015 225.00 -2.00 -0.88%
Milling Wheat Mar 2016 230.00 -2.00 -0.86%
Milling Wheat May 2016 234.00 -2.00 -0.85%
Durum Wheat Dec 2015 335.00 unch 0.00%
Durum Wheat Mar 2016 340.00 unch 0.00%
Durum Wheat May 2016 345.00 unch 0.00%
Barley Dec 2015 185.00 unch 0.00%
Barley Mar 2016 187.00 unch 0.00%
Barley May 2016 188.00 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 2015 891 -7.25 -0.81%
Soybeans Jan 2016 895.5 -6.5 -0.72%
Soybeans Mar 2016 898.5 -7 -0.77%
Soybeans May 2016 903 -6.5 -0.71%
Soybeans Jul 2016 908.25 -6.75 -0.74%
Soybean Meal Dec 2015 310.8 -1.2 -0.38%
Soybean Meal Jan 2016 309.6 -0.8 -0.26%
Soybean Meal Mar 2016 307.5 -0.7 -0.23%
Soybean Oil Dec 2015 28.14 -0.46 -1.61%
Soybean Oil Jan 2016 28.43 -0.46 -1.59%
Soybean Oil Mar 2016 28.66 -0.44 -1.51%
Corn Dec 2015 373 -3.75 -1.00%
Corn Mar 2016 383.75 -4 -1.03%
Corn May 2016 390.5 -3.5 -0.89%
Corn Jul 2016 395.75 -3.5 -0.88%
Corn Sep 2016 393.75 -3.5 -0.88%
Oats Dec 2015 227 -3.75 -1.63%
Oats Mar 2016 229.5 -3 -1.29%
Oats May 2016 231.25 -3.25 -1.39%
Oats Jul 2016 235 -3.25 -1.36%
Oats Sep 2016 237.25 -3.25 -1.35%
Wheat Dec 2015 485.75 -6.5 -1.32%
Wheat Mar 2016 493.25 -6.75 -1.35%
Wheat May 2016 497.75 -7.25 -1.44%
Wheat Jul 2016 501 -7.5 -1.47%
Wheat Sep 2016 509.25 -8 -1.55%
Minneapolis
Spring Wheat Dec 2015 504.5 -6.75 -1.32%
Spring Wheat Mar 2016 518.5 -5.75 -1.10%
Spring Wheat May 2016 529.5 -6.75 -1.26%
Spring Wheat Jul 2016 540 -6.5 -1.19%
Kansas City
Hard Red Wheat Dec 2015 472.25 -11.25 -2.33%
Hard Red Wheat Mar 2016 487.5 -11 -2.21%
Hard Red Wheat May 2016 497.5 -11 -2.16%
Hard Red Wheat Jul 2016 507.75 -10.75 -2.07%
Hard Red Wheat Sep 2016 521 -11 -2.07%
