The Good: Anyone worried about the increase in lentil production this year would lead to burdensome supplies this year should be encouraged by the ending stocks report for the 2019-20 crop year released today. The stocks level was 61,000 tonnes which is the lowest level since the 2009-10 crop year. Demand for lentils is expected to remain strong in the 2020-21 crop year which will keep stocks from building to burdensome levels.
The Bad: Crude oil price moves are a mixed blessing for farmers. A drop in the price of crude oil reduces the price for fuel inputs which is beneficial. Unfortunately, the drop in the crude prices also impacts the demand for biofuels. That happened today as the nearby crude contract moved below the US$40 per barrel mark, which pushed soybean oil futures lower. Crude oil futures dropped today as the the market is nervous about improvements to demand for crude oil and the associated petroleum products.
The Ugly: It was the worst week in the U.S. stock market since June and the two day drop in the S&P 500 fell by the largest amount since March. It could have been worse as the index moved close to the February gap level that would have caused technical damage to the index. The move lower this week is likely the first of many volatile trading days for stocks during the next two months.