The Good: The soybean market continues to move higher on production concerns in South America, specifically southern Brazil and Argentina. The weather models are indicating that heat and dryness are going to persist across much of the region into January. High temperatures in Buenos Aires tomorrow are going to reach the 30C mark, with Christmas temperatures expected to be around the 35C (take a look at the ugly section). The forecasts were enough to push the March soybean contract up 22.5 cents per bushel to close at US$13.35 per tonne. This is the highest close in the soybean March contract since August 25th. Soybeans were helped along by stronger soybean meal and oil prices, which also rallied on the weather concerns.
The Bad: The March canola contract was the exception to the rally in the oilseed market, with the nearby March position down C$2.20 per tonne to close at C$1,010.70 per tonne. The losses came despite rallies in soybean and palm oil during today’s trade. Soybean oil futures were strong in the session today with the March contract up 1.73 per cent. The bright spots in the canola market were the deferred positions which rallied along with the rest of the oilseed complex. July canola finished the day up 0.67 per cent to close at C$928.30 per tonne.
The Ugly: The weather across most of North America is going to be warm for Christmas, with the notable exception of the Prairies. That means that the highs on Christmas Day are going to range from -15C to -25C depending on your location. By no means will this be the coldest Christmas on record, but the normal high temperatures for Christmas range from -9C to -12C across the Prairies. As you can see from the map below, the models are indicating that the cool temperatures will stick around into the first week of January.