Periodic Updates on the Futures Markets

January canola is up $2.30 per metric ton (mt), March soybean oil is up .42 cents per pound, European February rapeseed is up 2.75 euros per mt and February Malaysian palm oil is down 1.17%. March oats are up 9 1/4 cent per bushel. January crude oil is up $1.43 per barrel and the December Canadian dollar is up .0019 at .7081. The U.S. Dollar Index is up .123 at 106.505 and the Brazilian real is up .00145 at 0.16615.

A relatively friendly USDA report is helping canola extend the recent rally. Combined with Thursday’s bullish Statistics Canada final production estimate, it has helped prices gain over $47 mt in five trading days. Also demonstrating clearly that money managers may have the ability to move the market given the size of their positions but that doesn’t mean they are correct — long term at least. They were heavy sellers prior to the reports and went into them with a net-short of 116,069 contracts or 2.321 million metric ton (mmt). Covering some of those shorts will surely be contributing to the present rally with details not known until Friday’s Commitments of Traders report.

Among the many data points, USDA pegged world canola ending stocks at 7.194 mmt versus 8.053 mmt last month and 10.109 last year. Seems like a bad time to be near a record net short speculative position. Soybean oil is trading higher as well after the USDA almost doubled the export estimate — to 1.100 billion pounds from 600 million. Considering almost 1 billion pounds has already been committed only nine weeks into the marketing year, further increases are likely.

Strength in energy markets are again offsetting strength in the U.S. dollar, leaving little net impact. The Brazilian real is still showing signs it has stabilized for the time being, taking that pressure off grain and oilseed markets. The Canadian dollar is quietly higher following the Bank of Canada’s half percent rate cut. Language removed regarding expecting further cuts resulted in a reversal from new contract lows.