The Good: Nearby canola contracts were up between 1.4 and 1.6 per cent today and soybeans were 1.5 to 1.7 per cent higher on the back of increased soybean oil futures. Nearby soybean oil futures were up 3.2 to 3.3 per cent with the nearby May contract closing at a contract high at 60.19 U.S. cents per pound. This moved the May contract close to the April 2011 high of 60.40 U.S. cents per pound. In fact, the intraday high today for May soybean oil was 60.38 U.S. cents. The tight vegetable oil stocks across the globe are causing this move higher in soybean oil. The next stop will be a test of the 2008 highs that were over 70 cents per pound!
The Bad: The Bank of Canada didn’t change the overnight rate this morning, but they sure caused a stir in the currency markets. First, they announced that the government bond purchase program was going to drop to three billion dollars per week. The Bank of Canada is the first G-7 central bank to slow their operations as the economy begins to improve. The second concern was a statement that indicated the forecast for increasing interest rates was moved from late 2023 to later on 2022. The impact was swift for the loonie that had been leaking lower due to the high deficit forecasts in the Federal budget. The loonie moved up to close at 80 cents.
The Ugly: Temperatures are still cold in western Kansas with an extended period of values that will cause damage to jointing wheat. The wheat crop in western Kansas ranges from 17 per cent jointed in the northwest to 71 per cent in the southwest. The counties on the Colorado-Kansas border were the coolest with the map below showing the number of hours below the 24C threshold. Damage to jointing wheat will occur at temperatures below 24F. MarketsFarm believes that the total damage to the crop will not be extensive with the potential areas of damage likely in the west central areas of the Sunflower state.