Major grains & oilseeds markets
Donald Trump’s election victory came as a surprise to the world and caused some chaos in the exchange markets. No doubt we will see more volatility before he actually takes power in January.
The WASDE report was somewhat bearish as the USDA found extra bushels in corn and soybean yields; this together with the strength in the US dollar and some fund selling reportedly took the commodity futures slightly lower.
The Funds turned sellers Friday at midsession, selling 6500 corn, 12,000 beans, 3000 wheat and 5000 soy oil contracts. The charts have turned negative possibly opening the gates to more Fund selling this week.
The financial markets we follow were volatile following the US election. We need to see these markets settle down before we can get a strong opinion where they are going and how they will affect our markets.
- The WASDE report gave us more soybean production, and with some small spec fund selling the market was lower.
- Weekly export numbers were very good and continue to be better than the USDA’s export forecast.
- Given the consumptive demand and adding the funds’ large long, producers would need to sell over 80 percent of their production by the end of December.
- The visible supply was put at 1.6 myn tonnes; not tight.
- Canola remains well-priced to EU, as we have been saying quite for some time.
- The USDA’s new import number of canola for China has been raised to the number we have been using for some time.
- HRW is very competitively priced in the Gulf and very cheap for all Pacific/South America destinations - especially considering better specifications.
- World FOB spreads continue to move significantly - FSU/Europen prices have increased, currencies are volatile, weather still has issues.
- Poor samples with high vomitoxin levels may prove ta have little value, even as feed, though quality samples as noted should carry significant demand.
- Like wheat, neither the USDA report nor the US elections changed the big picture for corn, and while US demand will remain strong, South American weather now moves front and center for market direction.
- Producer prices have remained firm due good movement. The low Canadian dollar (currently at 0.738 to the US$) has been helping as well.
- Prices remain firm. Over the past week another 71k mt of lentils were loaded to bulk vessels, putting YTD bulk shipments of 378k mt right in line with last year’s shipments to date.
- U.S. chickpea production looks to increase by 94% this year from 114k mt to 222k mt thanks to a bigger acreage seeded to chickpeas in the US and exceptionally good yields.
- The US has been Canada’s single biggest importer of chickpeas, taking 45k mt last year. We expect this number to drop this year both due to smaller availability in Canada and due to the larger US crop.
- Canaryseed deliveries have been slow and processors/ exporters are having trouble covering nearby needs. YTD exports are way behind last year’s and canaryseed prices have finally firmed up and $24/cwt fob farm Saskatchewan is bid.
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