Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: USDA exports sales reports were “disappointing” today with soybean net sales of 202,406 tonnes. That was enough to move the total commitments to 60.63 million tonnes which is just under (56,600 tonnes) the current USDA export estimate. This would be a good if the crop year was just around the corner, but there still is 24 weeks left in the row crop marketing year in the U.S. for row crops. This means that the USDA forecast of ending stocks are lower than the current forecast and will likely end up below 100 million bushels. The market seems intent on making soybeans cheaper because Argentina received beneficial rains. Tell that to the farmers in Argentina that are already in the fields. Pretty hard to see how these rains are doing much good in nearly mature soybean fields.

The Bad: The market was intent on selling off today and canola took the brunt of the abuse. The nearby May contract dropped to C$754.10 per tonne, which and has now nearly erased all of the gains posted in the contract this month. The driver of the sell off is largely external market factors as the U.S. dollar strengthens and prospects for inflation increase. The only problem is that the fundamentals have not changed one iota over the past two days. Canola exports last week were 304,500 tonnes in the week ending on March 14th, and the export pace is a mere 1.77 million tonnes ahead of last year. Making canola cheaper will not slow down the demand for canola. The irrational experiment continues once again by trying to limit demand by lower prices.

The Ugly: The markets couldn’t find anything concerning from the Federal Reserve, so they decided to make one up. The boogie man is inflation and the bet is that interest rates will have to rise. Ten year U.S. treasury notes climbed to 1.7190 per cent in today’s trade as the market continues to forecast that the Federal Reserve will be forced to increase interest rates. There is the old saying that we shouldn’t “fight the Fed” and  my bet is on the current low interest rate policy. In the meantime, we will have to deal with a stronger than expected U.S. dollar until the bond market realizes that is move is tilting at windmills.