Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: Canola has to be the good news story of the day. November futures closed the day at C$493.60 per tonne, which is the highest close since January 23rd. The canola market has pushed past the late July high and is now going to test the first level of resistance located just above the C$495 per tonne mark. It is important to remember that this rally is counter cyclical in that canola usually moves lower in August as harvest approaches. The canola harvest will gain momentum over the next month, which will likely stall the recent momentum in the canola market, but the overall fundamentals for this crop year remain strong.

The Bad: In contrast to the bullish move in the soybean oil market, soybean meal is languishing in a trading range between US$285 and US$310 per short tonne since the middle of April. A couple of attempts to break out of the range in July and August have failed and the longer term trend for soymeal is currently lower. This is important for the global crush economics for canola. With increasing oil prices, canola crush margins are improving not only in Canada but across the globe.

The Ugly: Hurricane Laura has intensified over the past few hours and is now the most powerful hurricane in the history of the Gulf. Communities in western Louisiana and eastern Texas. There will be some communities in the region that will likely be wiped out by the winds and storm surge. The impact on the Mississippi River system is likely to be relatively low with most of the damage to the west of the river system. The petroleum industry in the region will be the primary casualty with damage likely to “refinery row” in the Beaumont to Port Arthur region.