Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: Canola markets headed higher today and tested the 52 week high that was set during September. The canola market was boosted by increased palm and soybean oil futures today along with a nine to ten cent per bushel rally in soybeans. There was positive news on the export from as a modest sale of 132,000 tonnes was made to unknown destinations. The market is becoming anesthetized to these sales, but the modest sale is worth over 58 million dollars at current PNW export values. The sale was likely made for January delivery as export FOB capacity in the PNW is very tight for both November or December slots.

The Good (part two): December spring wheat futures forged ahead and pushed through the February highs to close the day at US$5.78 per bushel. The next target for the December spring wheat contract is the US$6.00 per bushel high set in January of this year. Spring wheat remains the value priced wheat in the U.S. with cash values at PNW export position essentially equal to HRW wheat. The difference of course is that the HRW wheat has a protein content of 11.5 per cent and the HRS protein is 14.0 per cent. In other words, pay the same money and get 2.5 per cent more protein!

The Ugly: There has been not a lot of need for grain drying this fall, and that is a good thing. Nearby natural gas futures have staged a strong rally since July and is now at levels not seen since the winter of 2018-19. That rally was interesting in that spread traders (long oil short natural gas) provided much of fuel (pardon the pun) to push natural gas higher. Natural gas fundamentals are looking bullish this winter as the cold weather has already arrived in Western Canada and cool temperatures are expected to move into the northeastern U.S. next week.