The Good: The good this week seems to be like the save on TSN that can’t be unseated because it’s so spectacular. Canola rumbled higher today to set another contract high and close in on the highs set in the drought scare of July 2017. Soybean oil and soybeans continued their upward move that supported canola values. Given that competing commodities are also in rally mode, canola still has some room to rumble higher.
The Bad: Spring wheat rallied today and closed up between one and two cents per bushel. The problem is that the winter wheat markets were higher on the day which continued to shrink the spread between spring and winter wheat. The March Minneapolis- Kansas City spread moved to a contract low with the spring wheat premium now at a measly one cent per bushel. The narrow spread is unsustainable as it prices protein levels at nearly zero. Given that the world is short protein, someone will eventually figure that out and buy a large amount of spring wheat.
The Ugly: The U.S. dollar index moved lower today and is now testing the channel bottom that has been formed since late July. The weak U.S. dollar is good for commodity prices, but the market support may soon end from the lower dollar index as it will likely move sideways in the coming days.