The Good: Canola markets moved higher today as the market responded to a lower Canadian dollar and stronger soybean oil prices. After hitting a contract high at the beginning of the month, the market had been trading in a range between C$480 and C$490 per tonne. With harvest pressure just around the corner, the gains in canola were impressive.
The Bad: For seven days Minneapolis wheat rallied off of contract lows and it looked like the contract was gaining some momentum. As is usual with this wheat market, just when you thought that a rally was developing, it is snatched away from you. Declines in production estimates in Europe and stabilizing Russian FOB values were not enough to insulate wheat from a big move lower. The December contract in Minneapolis traded nine cents per bushel lower today. A new tender from GASC (Egyptian purchasing agency) was not enough to support wheat values. Perhaps fund traders noticed that they hadn’t changed their short position in Minneapolis over the week ending on August 18th, so they decided to go even shorter today.
The Ugly: Hurricanes/tropical storms in the Gulf of Mexico are pretty commonplace from August through October, but having two hurricanes at once is certainly something to sit up and take notice. The first tropical storm to hit the Gulf coast will be Marco, which should make landfall this afternoon in southern Louisiana. Marco is expected to deliver winds in the 70 mph range when it hits the coast. Laura is expected track northeastward from Cuba and may develop into a hurricane when it arrives in the Louisiana/east Texas Gulf on Tuesday evening/Wednesday morning. The storms will certainly disrupt grain shipments from the Gulf this week, which will lower actual exports this week. Total Gulf shipments of corn, soybeans and wheat this past week hit the 1.59 million tonne mark.