Periodic Updates on the Futures Markets

January canola is up $17.60 per metric ton (mt), March soybean oil is up .89 cents per pound, European February rapeseed is down 3.75 euros per mt and February Malaysian Palm Oil is down 0.14%. March oats are down 4 1/4 cents per bushel. January crude oil is down $.82 per barrel and the December Canadian dollar is down .00615 at .70705. The U.S. Dollar Index is up .249 at 105.950. The Brazilian real is down .0022 at 0.16415.

Canola remains the leader Friday morning with soybean oil a close second. Supply issues highlighted by Thursday’s Statistics Canada final production estimate forced market participants to start taking price rationing a little more seriously for both canola and soybean oil. With the help of a weak Canadian dollar, January canola was able to surpass resistance at $600 mt along with slight resistance at $605. There is no sign of it doing so (and no reason to expect it), but a weak close now would not be a good look.

The Canadian dollar is down sharply following a troubling rise in the unemployment rate reported Friday morning. At 6.8%, it exceeded both expectations of 6.6% and last month’s 6.5%. It also significantly increased expectations of a half-point rate cut when the Bank of Canada next meets (Dec. 11) instead of a quarter. Strong headline numbers of 50,500 jobs added compared to expectations of 25,000 were overshadowed by a large increase in individuals entering the workforce.

The U.S. dollar tested support at 105.500 on a mixed non-farm payroll report but rallied off, so far. Treasury markets jumped on the results but have backed off slightly, putting the U.S. 10-year rate at 4.16%, off a low of 4.14 and much below the November high of over 4.47%. There too, the headline number reported greater than expected job creations along with positive revisions but was offset by a higher-than-expected unemployment rate (4.2 vs 4.1% expected). The other fly in the ointment was a conflicting household survey. It showed a loss of 355,000 jobs — quite a concerning difference.