Old crop canola joined old crop soybeans in being the greenest crop futures Tuesday, reflecting super-tight nearby commercial conditions.
But new crop canola and soybeans sold off, widening the inversion, showing that the market is relaxed about the medium-term situation once the new crop starts coming in.
“It’s nothing new. There’s not much out there now,” said P.I. Financial broker Ken Ball about the different situations of old crop and new crop North American oilseeds.
“But it’s questionable how long they can keep this up, especially in beans. There’s lots of beans in the world.”
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July canola futures rose $5.70 per tonne to $642.50 while November canola fell $3.50 per tonne to $551.40.
Spring wheat futures were essentially flat while other wheat types fell moderately as good growing conditions helped take the anxiety premium off southern Plains and Midwest crops.
Soybeans’ and canola’s rise Monday was mostly due to the rise of vegetable oil prices rather than meal, but in general the strength of canola and soybeans since last summer has been due to very low supplies of soybean meal, something that has forced livestock feeders to offer top dollar for North American meal.
But the world does not generally have a shortage of soybeans or soybean meal, so most of the drought trade has been constrained to nearby futures contracts and to a level at which it is affordable to import offshore soybeans.
Canola demand is still good, Ball said, but elements of demand have been falling and that shows there is not an insatiable hunger for canola at any price.
“Crushing has really dropped off. The market has done its job with demand,” said Ball about canola purchases by domestic crushers.
But prices are staying high and even improving on old crop because the world has no readily accessible supply of replacement canola.
It was another day of bullishness in world equity markets as hopes kept the record-high stock prices going higher, regardless of the multiple time bombs many see in the markets.
Joy over the Japanese central bank’s muscular monetary campaign, the belief that the U.S. federal reserve’s QEpalooza has reignited real demand in the U.S. economy and trust that eurotypes can keep the continent’s economies from cratering have allowed traders to get more and more bullish.
Commodities were slightly weaker in general Tuesday.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jul 2013 642.50 +5.70 +0.90%
Canola Nov 2013 547.80 -3.50 -0.63%
Canola Jan 2014 549.20 -3.30 -0.60%
Canola Mar 2014 546.00 -3.30 -0.60%
Canola May 2014 540.60 -3.30 -0.61%
Milling Wheat Jul 2013 294.00 unch 0.00%
Milling Wheat Oct 2013 294.00 unch 0.00%
Milling Wheat Dec 2013 294.00 unch 0.00%
Durum Wheat Jul 2013 301.90 unch 0.00%
Durum Wheat Oct 2013 294.90 unch 0.00%
Durum Wheat Dec 2013 299.40 unch 0.00%
Barley Jul 2013 244.00 unch 0.00%
Barley Oct 2013 194.00 unch 0.00%
Barley Dec 2013 199.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jul 2013 1478.25 +13.75 +0.94%
Soybeans Aug 2013 1390.25 -0.75 -0.05%
Soybeans Sep 2013 1288 -6.25 -0.48%
Soybeans Nov 2013 1220.75 -4.25 -0.35%
Soybeans Jan 2014 1227.5 -4.5 -0.37%
Soybeans Mar 2014 1232 -5 -0.40%
Soybean Meal Jul 2013 438.7 +3.4 +0.78%
Soybean Meal Aug 2013 406.7 -1.3 -0.32%
Soybean Meal Sep 2013 376.1 -2.7 -0.71%
Soybean Oil Jul 2013 49.48 +0.28 +0.57%
Soybean Oil Sep 2013 49.04 +0.17 +0.35%
Corn Jul 2013 640 -9.5 -1.46%
Corn Sep 2013 546.75 -7.75 -1.40%
Corn Dec 2013 520.25 unch 0.00%
Corn Mar 2014 531.25 +0.25 +0.05%
Corn May 2014 539.25 +0.5 +0.09%
Oats Jul 2013 355 -8.25 -2.27%
Oats Sep 2013 348.5 -9 -2.52%
Oats Dec 2013 349 -6 -1.69%
Oats Mar 2014 353.5 -6.75 -1.87%
Oats May 2014 355.75 -6.75 -1.86%
Wheat Jul 2013 680.5 -4.75 -0.69%
Wheat Sep 2013 688 -4.75 -0.69%
Wheat Dec 2013 703.5 -5 -0.71%
Wheat Mar 2014 720 -5 -0.69%
Wheat May 2014 727 -5 -0.68%
Minneapolis
Spring Wheat Jul 2013 813.5 +2.25 +0.28%
Spring Wheat Sep 2013 797 -2.25 -0.28%
Spring Wheat Dec 2013 802.5 -2.75 -0.34%
Spring Wheat Mar 2014 814.75 -2.5 -0.31%
Spring Wheat May 2014 819.75 -2.5 -0.30%
Kansas City
KCBT Red Wheat Jul 2013 738.5 -6.5 -0.87%
KCBT Red Wheat Sep 2013 745.5 -4.75 -0.63%
KCBT Red Wheat Mar 2014 772.75 -5.75 -0.74%
KCBT Red Wheat May 2014 777 -5.75 -0.73%
Light crude oil nearby futures in New York down 55 cents at $96.16 US per barrel.
The Canadian dollar at noon was 97.30 cents US, down from 97.38 cents the previous trading day. The U.S. dollar at noon was $1.0277 Cdn.
