The Loonie is the gift that keeps on giving (this week).
It’s been so kind to farmers since Monday. Just look at how the canola charts look:
It’s a nice little recovery on the charts for canola, which didn’t really fall that much on the news of the letter from China to the CFIA demanding blackleg-free canola imports. That’s a request for the impossible and if enforced would shut off that market. In light of that, the recovery today looks nice.
But charts, like statistics, can lie, and that’s what this one is doing if it’s trying to tell you what canola’s worth. That’s because it is in Canadian dollar terms and if you convert it to American dollars it would look a lot worse.
Check out this chart of the Canadian dollar vs. the U.S. dollar:
That sudden rise in late September did a lot to reduce ag prices for producers. The present slump, which has happened just as dramatically, is saving us from looking at some really ugly charts.
How ugly would the canola chart be without the Loonie’s present slump? I was just talking to a trader who said canola prices would be $30-40 less per tonne if the Loonie hadn’t fallen this week.
Soybeans have been falling today but the price of canola has been rising. The Loonie’s falling to, and that must be helping. But the trader I spoke with suspects there’s some kind of news leaking out of China, and those at the upper ends of the grain business are reacting to info they’re getting before the common trading folk.
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Or maybe it’s just rumours and chatter, that inexhaustible fuel of the markets.
