The Good: There was precious little good in the agricultural futures today, but the recent moves in currency have pushed gold to recent highs. Gold has long been a hedge against inflation, but has been stuck in a rut over the past seven years. The move by all governments into taking on additional debt has driven interest rates to all time lows, which makes the opportunity cost of inventing in gold nearly zero. In fact, when compared to negative interest bonds, gold is certainly a safe haven in the storm. Despite the fact that we have hit all time highs in gold, demand is expected to increase as people try to move assets into safe haven investments.
The Bad: The canola streak ended today, when the market closed down C$1.10 per tonne in the nearby contracts. November canola finished the day at C$487.60 per tonne which was off the daily low. The three consecutive days of gains tested the C$490 per tonne level but has failed to breach this psychological level. Tomorrow will be an import day for the market to see if canola can move back to test the principal area of resistance.
The Ugly: Spring wheat seems to have all the characteristics of a leaky boat. Despite strong export shipments last week, spring week continues to plumb the contract lows as we head into harvest. South Dakota is seeing initial harvest activity and southern North Dakota should see some preliminary cutting by the end of the week. This does not auger well for futures markets as harvest pressure enters the equation during August. In the meantime, product continues to fly out of the door.