Canola not moving in sympathy with other markets today

[AlbertaFarmer5]

You must have forgot the rules of canola trading:

1. Soyoil goes up canola goes sideways.

2. Soymeal goes up canola goes sideways.

3. Beans go up canola goes sideways.

4. When Palm oil, soy oil, meal, beans or crude oil goes down even a little bit. Holy shit the world is gonna drown in oil, better sell canola limit down!


But I do think that canola has created some level of independence from soybeans and the last year or 2, hasen't been moving same direction all the time

I'd been formulating the same rule set in recent years. But as you noted, it has taken on a mind of it's own lately, most days, I can't find any correlation with it's moves with any of the associated commodities or currencies. It is almost like supply and demand have something to do with it, hard to believe, I know.

[jdepape]

I haven’t been here for some time but I’ll bite.
We saw canola move up more than $6/t after the report. In my view, that was mostly “holy shit, I didn’t expect that!” short-covering. Once it was done, we watched to see if there was any commercial consumptive buying. But with record amounts of canola in the system for this time of the year, and rail transport problems still not corrected, who’s gonna sell it?
The track Vancouver basis remains firm and the country basis remains under pressure, widening the export spread (remember 2013-14?). Remember, the canola futures contract has delivery in the prairies so it is not a good reflection of Vancouver/offshore markets. There may be interest from offshore – due to support from outside markets – but if you can’t get it there, you may not be interested in selling it.
And, since things have been congested for some time, I’m hearing there is still good sales pressure from farmers wanting to move canola, providing selling pressure on futures (as hedges). Current country basis (under pressure) is a good indication of that theory.
And crush margins (in USD) didn’t change that much.

All in all, until we get canola moving better, I won't be surprised that canola is not keeping pace with beans etc.

[Guest]

lucky we have all this govt funded transparency now to work with