Thursday was a mostly positive day for our markets. Spot corn closed up 3/4, spot soybeans closed down 2 3/4, spot winter wheat closed up 5 1/2 and spot spring wheat closed up 7 1/2. In the overnight trade corn, soybeans and spring wheat are negative with winter wheat still on the positive side. Oil closed up $2.21 yesterday at $65.42 per barrel. It is weaker in trading this morning with it now valued at $65.10 per barrel. Our dollar in some very choppy trading has stayed between a low of $0.737 US and a high of $0.741 US over the last 24 hours. This morning it is currently valued at $0.738 US.
Soybean prices were higher earlier yesterday before pulling back. It seems that with some positive harvest data out of Brazil and the short term forecast very favourable for the rest of their still growing crop the large crop already projected is getting larger. New rumours have the crop possibly approaching up to 185 million tonnes for this harvest.
Last week it was the cold weather in the US which brought some support to the winter wheat market. This week it is cold weather in the Black Sea region with more specifically Ukraine. Their winter wheat crop is 95% of their usual wheat production. They produce only 2.7% of the global wheat supplies but account for 6.4% of the global wheat export market. Even though global supplies are currently very strong the markets are always looking for some reason to go positive and weather concerns are always a good reason.
Both the Federal Reserve and the Bank of Canada held their benchmark interest rate steady this week. Neither were expected to change at this time but there is definitely thought that they may both decrease a bit later this year. We all know that President Trump will be appointing a new Federal Chair later this year and he is looking for this new boss to decrease interest rates quickly. The relationship of the interest rate between our two countries is sometimes directly related to our currencies relevant values. Higher interest rate in either country should in theory increase the value of their currency. Our benchmark rate is currently lower than the US benchmark rate and this should help to keep our dollar lower in value. A stronger Canadian Dollar would be very harmful to local basis levels which would directly decrease prices paid for our commodities.
As we are talking about some of the outside markets gold and silver continue to surge with crude oil also higher. Earlier this week we talked about President Trump threatening Iran and this has brought some uncertainty into the crude oil market. This uncertainty has brought investors into the gold and silver markets looking for some safe havens to invest in and prices have soared. Will this trend continue or not will be very interesting to watch. It is too bad that these same investors would not pull our commodity prices higher at the same time.
Friday’s thought: If you are not willing to learn, no one can help you. If you are determined to learn, no one can stop you!
Delores Seiter | 613-880-7458
Bob Orr | 613-720-1271
Tony Mitchell | 613-227-2525
Office | 613-489-0956
