Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The grain markets are having difficulty sliding up the slope caused by the potential for record corn and wheat production this year, but vegetable oils continue to show strength which is supporting the canola markets. Soybean oil continued to move higher today and is forming a top with key resistance near 31.90 cents per pound.  A close above that level this week would be bullish for soybean oil and allow a run to 32.5 cents per pound. This would obviously be good for the canola market.

The Bad: As the growing season progresses, the chances of lower corn yields become more and more remote. Corn has passed through the critical reproductive growth phase and is now filling. Although moisture has been below normal in the western Corn Belt over the past month, temperatures have been quite moderate. Today is the perfect example of nearly ideal growing conditions with highs in the 70s and low 80s from South Dakota to Ohio. The forecast for U.S. corn growing regions remain benign and corn futures continue to drift towards the US$3.00 per bushel mark. Ironically, corn futures managed to trade unchanged today, despite the good weather.


The Ugly: Canada is in the crosshairs of the U.S. again as the President announced that aluminium tariffs of 10 per cent will begin on August 16th. Of course there will be retaliation by Canada and we begin the cycle again. This is not good news for the new trade agreement which is just over one month old! Of course aluminum futures responded positively today, despite the fact that it is an extremely thin contract. The interesting thing about aluminium is that production can not be curtailed quickly, so aluminum stockpiles in Canada will grow. Of course U.S. manufacturers of aluminum products are going to have to pay a higher price. Now that will help the U.S. economy recover!?