Crop futures escape stock market plunge

Want a nice example of how the grains futures markets and outside markets have become mostly detached?

Just look at today, in which most North American crop futures were slightly weaker, with a few like winter wheat slightly stronger, while stock markets tanked.

Grains futures did not seem to take their lead from anyone.

“It’s felt this way for a while,” said FarmLink Marketing’s Jon Driedger about the divergent action in crop and other markets

“It’s left like they’ve been disconnected from a lot of those outside markets.”

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The Dow 30 was down more than 250 points mid-Friday afternoon, gold was down 2.5 percent, the Canadian dollar was down, U.S. bond prices were down and the week seemed to be ending on a sour note.

Except in grains, which were mostly flat.

Driedger said crop futures seem to be finally back to trading on their own fundamentals, and right now that means there’s not much news to send markets gyrating.

“I wonder if it’s just quiet today, consolidated trade to close out the week.”

It was different early in the week, when wheat took some hits.

Friday might also have been quiet because the U.S. Department of Agriculture is releasing data Tuesday that could have a market impact. Often traders back away from the markets in the days before reports come out.

The stock markets selloff appeared to be triggered by a positive jobs report of 295,000 jobs created in January. That’s good news for the economy but bad news for many investments that are sensitive to rising interest rates in the United States.

Good economic news on employment makes many expect the U.S. Federal Reserve Bank to begin raising its key rates later this year.

Stocks with a strong dividend component often lose value when interest rates rise, since bonds and other fixed income investments begin having higher rates and become more attractive than stocks, which are generally riskier.

Such seemed the situation Friday, with good dividend payers slipping more than growth stocks.

The Canadian dollar fell, which is why canola futures seemed to rise rather than fall slightly. When converted to U.S. dollars, canola fell.

Light crude oil nearby futures in New York were down $1.15 to US$49.61 per barrel.

The Canadian dollar at noon was US79.26 cents, down from 80.12 cents the previous trading day. The U.S. dollar at noon was C$1.2616.

Winnipeg ICE Futures Canada dollars per tonne
Canola Mar 2015   445.70   +0.30   +0.07%
Canola May 2015   450.70   +0.30   +0.07%
Canola Jul 2015   449.60   +0.10   +0.02%
Canola Nov 2015   444.70   +0.10   +0.02%
Canola Jan 2016   446.20   -0.10   -0.02%

Milling Wheat Mar 2015   220.00   -1.00   -0.45%
Milling Wheat May 2015   227.00   -1.00   -0.44%
Milling Wheat Jul 2015   230.00   unch   0.00%

Durum Wheat Mar 2015   333.00   unch   0.00%
Durum Wheat May 2015   323.00   unch   0.00%
Durum Wheat Jul 2015   313.00   unch   0.00%

Barley Mar 2015   182.00   unch   0.00%
Barley May 2015   184.00   unch   0.00%
Barley Jul 2015   186.00   unch   0.00%

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

Chicago
Soybeans Mar 2015   979.25   unch   0.00%
Soybeans May 2015   985   -0.5   -0.05%
Soybeans Jul 2015   990.5   -0.5   -0.05%
Soybeans Aug 2015   989   unch   0.00%
Soybeans Sep 2015   975   +0.25   +0.03%
Soybeans Nov 2015   965.25   -0.75   -0.08%

Soybean Meal Mar 2015   337   +2.6   +0.78%
Soybean Meal May 2015   327.7   +2.5   +0.77%
Soybean Meal Jul 2015   325   +1.6   +0.49%

Soybean Oil Mar 2015   31.14   -0.29   -0.92%
Soybean Oil May 2015   31.28   -0.29   -0.92%
Soybean Oil Jul 2015   31.46   -0.3   -0.94%

Corn Mar 2015   379.25   -3.5   -0.91%
Corn May 2015   386   -4.5   -1.15%
Corn Jul 2015   394   -4.25   -1.07%
Corn Sep 2015   401.25   -4.25   -1.05%
Corn Dec 2015   410.75   -3.25   -0.79%

Oats Mar 2015   295.25   +2   +0.68%
Oats May 2015   283   -3.5   -1.22%
Oats Jul 2015   284   -1.5   -0.53%
Oats Sep 2015   284.25   -0.5   -0.18%
Oats Dec 2015   282.75   -2   -0.70%

Wheat Mar 2015   485.75   +4.5   +0.94%
Wheat May 2015   482.5   +2   +0.42%
Wheat Jul 2015   486.5   -1.25   -0.26%
Wheat Sep 2015   495.5   -3.25   -0.65%
Wheat Dec 2015   510.25   -4.75   -0.92%

Minneapolis
Spring Wheat Mar 2015   542   -5   -0.91%
Spring Wheat May 2015   556.5   -2   -0.36%
Spring Wheat Jul 2015   561.75   -2.75   -0.49%
Spring Wheat Sep 2015   569   -2.25   -0.39%
Spring Wheat Dec 2015   579.5   -1.25   -0.22%

Kansas City
Hard Red Wheat Mar 2015   520.75   +6.75   +1.31%
Hard Red Wheat May 2015   522.25   +5.25   +1.02%
Hard Red Wheat Jul 2015   527.5   +3.75   +0.72%
Hard Red Wheat Sep 2015   539.25   +2.75   +0.51%
Hard Red Wheat Dec 2015   556   +2.5   +0.45%

Contact ed.white@producer.com