The Good: Canola stayed positive for most of the day with the November contract closing at C$883.40 per tonne. Canola appears to be settling in a trading range over the past 10 days with the market hitting a peak on lucky July 13th. The trend has been downwards since then, but the market quickly bounced off the 20 day moving average yesterday and manage to close higher. This is a good sign for the trade next week. The market will likely continue to move sideways into the middle of August as little in the way of fresh news will influence the markets. Soybean markets are going to be volatile as the market evaluates every forecast and rain in the Corn Belt. No such worries in Western Canada as the forecast remains mostly dry and hot.
The Bad: The spring wheat tour begins in North Dakota next week. Traders decided to take a chunk out of the September contract today before heading out to Fargo. The tour is likely to confirm the dismal yields reported USDA numbers released on July 13th. The crop in the Northern Plains has deteriorated since the beginning of the month, so the trade will be following the results closely. Today’s trading action indicates that the trade feels that there is limited downside to the crop estimates. Today’s commitment of traders report had the Minneapolis market net long by 8,860 contracts on July 20th. Perhaps the traders were just easing their long position into the weekend.
The Ugly: The corn market dropped today due to a changing forecast for the U.S. Corn Belt. The long term forecast was cooler than earlier model runs, which pushed corn and soybean prices lower. Someone should have let the NWS know about the cooler temperatures, because the current forecast continues to drop above normal temperatures over most of the Corn Belt.