Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: We have had nothing but bad news on the input front for farmers over the past few months, but it appears that the nearby crude oil contract is poised to move lower. The Energy Information Agency (EIA) published their weekly report and the numbers were largely bullish. Crude oil, gasoline and diesel stocks moved lower during the past week. This should have been bullish for the market, but nearby WTI futures were down 2.97 per cent today to close at C$78.36 per barrel. The market is still digesting rumblings that the U.S. administration is going to coordinate a release of the SPR with China also relating their stocks into their respective domestic markets. I find it hard to believe that China and the U.S. can agree on anything, but high oil prices may be a uniting factor.

The Bad: The rains don’t want to quit in Australia as the weather pattern over the next seven days is calling for above normal precipitation in eastern and southeastern Australia. The harvest is still focussed on finishing the harvest in Queensland and northern New South Wales, but crops are reaching maturity in central New South Wales and South Australia. Reports of quality from the Australian harvest to date have been poor, with falling number issues hampering export shipments. This is positive for the world wheat market as Asia will likely have to look to alternative exporters to supply their needs. The problem is that quality wheat supplies are still very short.

The Ugly: Canola continued the Jekyll and Hyde routine this week as the January contract clawed back yesterday’s gains despite some positive news for U.S. soybeans and soybean oil. The January soybean futures closed the day up 26.75 U.S. cents as rumours of Chinese export business were partially confirmed by and overnight sale of 132,000 tonnes. This makes the drop in the canola market even more disappointing. Looking on the positive side, the December contract still settled the session above the C$1,000 per tonne mark. at C$1003.70 per tonne.