The Good, Bad & Ugly is being written before market close today. I have a date with a combine.
The Good: Canola is back to moving higher today as the market moved back in the positive direction after posting losses for five consecutive trading sessions. The move today pushed canola back above the C$515 per tonne level, which is still down by nearly C$15 per tonne on the week. The good news is that most of the trade this week was based on momentum and outside technical factors. The fundamentals for the oilseed sector remain positive.
The Bad: So much for improving momentum in the wheat markets. Wheat finished the week on the down side, which pushed nearby Minneapolis futures back down to the US$5.29 per bushel level. This is the traders mantra regarding all varieties of wheat this year – short the rallies. A large shift in sentiment is needed to shift the wheat market out of the sideways doldrums.
The Ugly: Brazil has remained dry through most of the month with only one rainfall event reported in the extreme south last week. Soil moisture levels are critically low and farmers in the northern growing areas are going to delay planting if rains are not received soon. The northern areas still have a month to receive rainfall. There is no question that northern Brazil will receive rains for the soybean crop, the question is about how long will they have to wait. Any delays into November will cause problems for the corn crop which is planted after the soybeans.