Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The January canola futures hit a new contract high today and settled at C$954.60 per tonne. The daily gain in the January was C$11.10 per tonne, which is a 1.18 per cent increase.  The ICE canola contract continued to follow the European rapeseed contract, which was also up on the day. Lower soybean oil declines and mixed soybean futures failed to hold canola down in todays trading session. The jump in canola futures values pushed cash bids in Western Canada close to or above the C$22 per bushel mark.

The Bad: Spring wheat futures had a roller coaster of a day and eventually closed down after setting new intraday contract highs. Profit taking was blamed for the drop in the December contract, although many participants have fled the nearby December contract for the relative stability of the March futures. MarketsFarm believes that domestic (North American) buyers are still trying to cover the JFM positions which has led to the recent increase in prices. Just a quick word to the millers – farmers aren’t making any new bread quality wheat in North America for another six months!

The Ugly: Inflation is transitory and will move back to “normal” levels after the base effects of the pandemic are through the system. This is the line that most central bankers seem to be following despite sharp  increases in food and energy costs.  Spanish inflation numbers for September hit a 13 year high in September of four per cent and are indicative of price increases across Europe. No wonder central banks like to focus on the core rate of inflation that excludes energy and food. Back here in the real world, fuels prices continue to rise on the back of the highest nearby crude oil prices since October of 2014.