The Good: Canola futures powered higher today on the back of soybean and soybean oil futures. As we have said previously, this is an impressive move given that the seasonal trend is usually down for canola prior to harvest. The move today flirted with the C$500 per tonne mark (November contract), before settling back at the C$497.20 per tonne level. Canola has now worked its way back to the year to date highs that were hit in the middle of January. It has been a long road back during the past eight months, but demand remains strong for oilseeds for the remainder of the calendar year.
The Good Part 2: There was little in the way of bad and ugly news in the commodity markets today, so we will go with only good market news today. December spring wheat futures moved through resistance levels today and flirted with the US$5.45 per bushel level before settling at US$5.405 per bushel. The spring wheat market has had trouble gaining bullish momentum over the past six months, with funds continuing to short the market. This move should push some of shorts to lighten their position as harvest pressure begins to subside.
The Good Part 3: The U.S. reported overnight sales of 887,000 tonnes of corn to China and the infamous “unknown destinations”. The net corn export sales for the week ending on August 20th were also strong at 1.18 million tonnes in new crop positions. The 2020-21 marketing year will have the largest sales of new crop corn since the 1996-97 crop year. This is bullish news for corn as domestic demand in the U.S. has been hurt by reduced ethanol production due to the COVID-19 crisis. With a large (but reduced) crop on the way in the U.S., the rally in corn will run into resistance as futures push close to the US$3.60 per tonne level.