Glacier FarmMedia COVID-19 & the Farm

Experts

 

The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The spring wheat market has been slowly and surely moving back close to contract highs with today’s action pushing the December contract 5.25 cents per bushel to close at US$9.22 per bushel. This puts the contract within 15 cents per bushel of the previous contract highs set in August. Algeria released another wheat tender this week only hours after the Agriculture Minister stated that they would be looking to reduce imports this year. Egypt is also rumoured to be issuing a tender sometime this week which would be the first tender since earlier this month. Delivery for that tender was for theist week of October and first week of November. The calendar flips to October later this week, which should mean some urgency in the next purchase.

 

The Bad:  The canola markets winning streak halted today after trading higher for most of the session. The losses in canola today came despite a 0.4 per cent gain in soybean oil and positive soybean futures. Canola continues to suffer from poor crush margins which is limiting the upside of the nearby contracts. One of the main concerns remains is the price of soybean oil which has been in a bearish trend in the past two months. Although the global vegetable oil situation is tight, soybean oil futures are concerned with the Biden administrations upcoming decisions on biofuel blending requirements.

The Ugly:  A mere 18 months ago nearby WTI futures traded at US$-40 per barrel, but today crude oil prices hit a three year high of US$75.30 per barrel. The October 2018 high was US$76.90 per barrel with the next stop the US$79.99 per barrel level set in November of 2014. News that Goldman Sachs was calling for US$90 per barrel level in the nearby WTI contract. This is not good news for consumers as gas and diesel prices are also moving to multi-year highs.