Canada Markets

January Canola's Historical Trade on U.S. Thanksgiving

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue bars represent the dollar per metric ton move realized in January canola on the U.S. Thanksgiving holiday over the past 10 years, while the brown bars shows the move realized in the day following Thanksgiving when soybean trade resumes, as measured against the primary vertical axis. The black line with markers represents the percent change in January canola's daily volume realized on U.S. Thanksgiving, as measured against the secondary vertical axis. (DTN graphic by Cliff Jamieson)

In Wednesday's DTN Early Word Grains, DTN Contributing Analyst Tregg Cronin discussed the upcoming U.S. Thanksgiving holiday, with no U.S. trade on Thursday and a shortened session planned for Friday. "Most trading desks become ghost towns until Monday," stated Cronin.

Over much of this period, ICE Canada canola will trade on its own, with the attached chart pointing to the results of this solo trade over the past 10 years (2008 to 2017). DTN's Five-Year Seasonal Index study, just one of six factors watched in forming DTN's grain marketing strategy, states that canola prices tend to move sideways during the month of November over the past five years, with strong demand met with producer deliveries.

As shown by the blue bars on the attached chart, the January canola future has fallen in nine of the past 10 years without the leadership of the U.S. soybean market on the Thursday of the U.S. Thanksgiving, including the past seven consecutive years. The daily loss over these nine years averaged $3.28/metric ton, ranging from a loss of $.60/mt in 2016 to a daily loss of $6.90/mt in 2008.

The brown bars represent the price action of the same future on the day following the U.S. Thanksgiving. In five of the 10 years, prices corrected from the previous day's move on the Friday following Thanksgiving. Only once did the price move higher on the Friday offset the previous day's losses, as seen in 2016. In 2010, the only year to result in a higher close on Thanksgiving Thursday, the $2.90/mt gain was offset by a $10.10/mt move lower on the following day.

In five of the 10 years, losses on Thanksgiving Thursday were followed by further losses in the following session, or the Friday following Thanksgiving.

The black line with markers represents the percent change in January canola's trade volume on the Thursday of the U.S. Thanksgiving from the previous day. This day-over-day percent change ranges from minus 29% in 2010 to as much as 88% in 2013, averaging minus 57.5% over the 10 years.

In two of the 10 years, trade volume returned to the level reported for the Wednesday prior to the U.S. holiday by the Friday following Thanksgiving, while a further six of the 10 years saw activity return to Wednesday's level by the following Monday.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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