The Good: Well that dint take long! Canola futures moved C$22.10 per tonne higher today to close the day at C$776.20 per tonne. The selling pressure in general commodities subsided, making the way for a significant uptick in futures markets. Crude oil, soybean oil, corn and soybeans staged significant rallies today. May soybean oil futures were up 0.65 per cent today to close at 53.87 U.S. cents per pound. All of this conspired to push the canola market higher. One should expect the market to push back towards the C$800 per tonne level.
The Bad: The U.S. dollar index continued to march higher today as it closed at 91.92 points. The index has now moved back to the upper end of the recent trading range. An increasing U.S. dollar would provide significant headwind for commodities in general. Higher commodity prices are already stretching the ability of foreign consumers to pay. An increasing dollar just exacerbates the problem.
The Ugly: The main concern in Brazil has been the wet conditions that have delayed both soybean harvest and corn planting. Now that the harvest is almost finished, the weather is Turing hot and dry. Mostly dry weather next week is expected in Mato Grosso. There is still plenty of time to go in the corn growing season for the winter corn crop (safrinha), a dry start would not be ideal. The storm track has dropped into Argentina, just in time to slow the corn and soybean harvest in Argentina. The corn harvest is already 6.9 per cent complete in northern parts of Argentina.