The Good: There was a whole lot of bad and ugly news today, so there is little in the way of good news from the market moves today. One positive piece of information today was the Commitment of Traders report for spring wheat. Managed money positions in spring wheat reduced their short by 3,163 contracts or 430,413 tonnes from last weeks report. This is small consolation in light of the fact that spring wheat dropped between eight and ten cents per bushel today. Unfortunately the net short position of the managed funds is still 13,940 contracts or 1.9 million tonnes.
The Bad: No doubt about it the drop in the wheat markets today was the Bad news today. You could pick any chart from the three U.S. exchanges, but the Chicago market dropped the most today as the September contract finished down 12.5 cents in today’s trade. Kansas City and Minneapolis futures were down 10 cents during the session.The ugly part of the Chicago chart is that we had been stabilizing in the US$4.85 to US$4.90 per bushel level. We are now posting contract lows for wheat with little in the way of technical support until the contract hits the US$4.85 per bushel level.
The Ugly: Stock markets continued the volatile week of trading with the U.S. major indices dropping between 2.4 and 2.8 per cent. The Canadian market was off by 1.9 per cent, with the weekly drop nearly 300 points. The increasing number of cases in the U.S. is causing most of the concerns in the market as it appears that the resumption of “normal” appears to be some time away. Weakness in the equity sector is likely to spill over the commodity sector as money moved towards the sidelines.