Plunging Palm Oil

[errolanderson]

Noticeable drop in Malaysian palm oil prices over the past ten (10) days. Palm prices heaved more than 10% last week and nearly another 3% overnight. China buyer demand appears weakening.

[farming101]

Canola limit move is $30, then $45, then $60.
No saying that a limit move is coming, but today's move shows that volatility is kicking in.
There are some very profitable positions that speculators will want to realize on.
I look forward with interest to next weekend's COT report

[errolanderson]

Canola limit move is $30, then $45, then $60.
No saying that a limit move is coming, but today's move shows that volatility is kicking in.
There are some very profitable positions that speculators will want to realize on.
I look forward with interest to next weekend's COT report

What a terrific rally for growers to price cash canola into whether old or new crop . . . .

[farming101]

I will speculate that the prices will not fade too far at this point in time.

There is this little matter of soil moisture reserves...and empty storage bins.
Yes there is snow on the ground but good crops need rains to germinate after seeding and rains in June to make them grow and good soil moisture to get the crop to harvest.
As the saying goes, we don't manage weather, we watch it

[AlbertaFarmer5]

How far could soybean oil drop, or canola Before it does technical damage to the trend ?

[furrowtickler]

What a terrific rally for growers to price cash canola into whether old or new crop . . . .

Yes it was , for some of the crop
Hopefully it stays well above $12
Land , machinery and inputs take a huge chunk nowadays for those of us farming .
$10 was a complete joke with very low stocks .... back over a year
But yup it has been a decent opportunity for some crop pricing .

[malleefarmer]

The whole grain complex at moment driven by russia taxes, weather nh dry weather sa maybe wet.

Tonnes of all commodities roughly known.

To me whole market is getting skittish. Wheat barley canola beans corn.

Gonna need bad news weekly to keep it going

[furrowtickler]

The whole grain complex at moment driven by russia taxes, weather nh dry weather sa maybe wet.

Tonnes of all commodities roughly known.

To me whole market is getting skittish. Wheat barley canola beans corn.

Gonna need bad news weekly to keep it going

I think you may very well right

[malleefarmer]

Went to bed last night at 10.30;i think wheat was up 15 everything else red.

I thought wow if wheat powers through tonight it could blow off but of course didnt hahppen

[errolanderson]

An opinion, but I have seen this type of market action in my career many times as a trader.

When a bull market eventually goes into a dive, emotion runs high. We have all heard this before . . . the greed, hope, fear, panic cycle of a market. Market emotion drives this. We are all human.

Long liquidation triggers as calls for cash (margin calls) force selling. But remember the specs in the market classically drive prices too high in a bull market. They can also provide a grower better-than-expected returns through heated bull markets.

Once this selling exhausts itself, a market may correct itself technically rebounding between 50 to 66% of the drop. Smoke and mirrors you say . . . . But for the market to actually flare to new highs once again takes a tankful of fresh bullish gas (news) to achieve. This is not impossible, but rare.

But you say . . . there is little canola left in the bin. True. But demand is king in any commodity market, not supply. Supply can be dead tight into crop year end, but if demand fades, prices can still drop.

The key straight ahead is the health of demand . . . and the new factor on-the-watch will be spring/summer weather.

In other words, we are likely to continue to see price volatility. All the best in your marketing.

[malleefarmer]

Have to say not a truer word spoken.

Dont matter if its wheat wool lamb oil if there aint demand supply side of argument means zit.

[Guest]

An opinion, but I have seen this type of market action in my career many times as a trader.

When a bull market eventually goes into a dive, emotion runs high. We have all heard this before . . . the greed, hope, fear, panic cycle of a market. Market emotion drives this. We are all human.

Long liquidation triggers as calls for cash (margin calls) force selling. But remember the specs in the market classically drive prices too high in a bull market. They can also provide a grower better-than-expected returns through heated bull markets.

Once this selling exhausts itself, a market may correct itself technically rebounding between 50 to 66% of the drop. Smoke and mirrors you say . . . . But for the market to actually flare to new highs once again takes a tankful of fresh bullish gas (news) to achieve. This is not impossible, but rare.

But you say . . . there is little canola left in the bin. True. But demand is king in any commodity market, not supply. Supply can be dead tight into crop year end, but if demand fades, prices can still drop.

The key straight ahead is the health of demand . . . and the new factor on-the-watch will be spring/summer weather.

In other words, we are likely to continue to see price volatility. All the best in your marketing.

agreed , there is a limit to everything
this could be the downslope
but looking at drought map its not hard to see why farmers are reluctant to sign the one sided contracts

[jazz]

An opinion, but I have seen this type of market action in my career many times as a trader.

I remember working in calgary in 2008 during the great recession. Everything literally dropped overnight. My office mates literally calculated they needed to work an extra 10 yrs to make up what they had put away up until then.

It can drop that fast, but IMHO we are still early in the game. Bidens treasury pick is Old Yellen and she said today to run the presses as fast as they need to be.

I dont think we can crash until the stimulus has run its course or ran into headwinds with the dollar and bonds. I think thats a little ways off yet.

I would be worried more about canada. An economy the size of Texas and smaller than California with $1.3T in total fed gov debt obligations is really playing with fire.

[malleefarmer]

A canola market commentator here said last week “the strongest correlation in hole commodity index is between palm oil and canola bar none” “ rarely do they go in opposite directions forvto long before one corrects to meet the other be it up or down history has shown palm oil is king”

[AlbertaFarmer5]

I've tried to follow the corellation between palm oil or soybean oil and canola.
Soybean oil has a very distinct top at this time of year almost every year. Canola, locally has a seasonal peak in early summer most years, almost competely out of sync on an seasonal basis.