Glacier FarmMedia COVID-19 & the Farm

Experts

 

The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The canola markets staged a recovery today as the nearby futures moved C$8.60 per tonne higher to close at C$570 per tonne. Before we celebrate the move, this recovery only nudged canola futures back in line with soybeans and other oilseeds. March canola futures are currently priced at a C$21 per tonne premium to soybeans, which is still C$24 per tonne below the long term average. Soybean oil futures did provide support for canola today, but the ICE crush margin will remain mostly unchanged to slightly lower, despite the increase in canola values.

The Bad: Wheat markets seemed to have all of the momentum going into the trading session today. A long list of tenders were released and the results of some recent tenders pointed to higher prices. The threat of Argentinian wheat displacing European wheat in the Mediterranean basin raised concerns and pushed prices lower. Argentina has just recently harvested their crop, but most of the supplies will be needed to satisfy demand from Brazil, their largest customer. Despite this fact, wheat markets are still skittish as the Russian export tariffs come closer to reality.

 

The Ugly: Soybean markets were also stronger through the overnight session and slowly lost their mojo. USDA reported significant old crop sales of nearly 300,000 tonnes to China and Mexico. Looks like the strategy of lowering prices to decrease demand is an abject failure out of the gate. Make no mistake about it, no matter how much rain falls in South America, U.S. soybean exports need to slow down quickly or stocks will ending stocks will become impossibly tight.