Thursday was a mostly negative day for our markets. Harvest corn closed down 7 1/2, harvest soybeans closed down 4 1/2, harvest winter wheat closed down 3/4 and harvest spring wheat closed up 2. In the overnight trade all of our markets are on the negative side. Oil closed down $2.32 yesterday at $87.71 per barrel. It is weaker again this morning with it now trading at $84.67 per barrel. Our dollar has traded between a low of $0.713 US and a high of $0.716 US over the last 24 hours. This morning it is currently valued at $0.715 US.
Yesterday the USDA released their monthly WASDE report and they did not really surprise the marketplace at all. The biggest change was in wheat yield for this year in the US with a 10.9% decrease in domestic wheat production. The wheat market quickly jumped to the positive side but pulled back as the trading day progressed. The world balance sheet was amended with a few areas of higher production and other areas of lower production. The net result was the reconfirmation of a large global supply of wheat.
The corn balance sheet in the US was amended with increased exports however the domestic ethanol grind was decreased. For the world balance sheet production was increased in Brazil by 3 million tonnes and was also increased in Argentina by 2 million tonnes. The net result was an increase in world stocks which should be considered bearish for prices going forward.
Soybean exports were decreased in the US but they were offset with an increase in domestic soybean crush numbers. Production levels were left unchanged in Brazil for the current crop but were increased for Argentina with another 2 million tonnes. This report did not really deal with any increased purchases (maybe expected) from China and as such should be considered mostly neutral for the soybean complex.
With all of our markets negative this morning we can see that the marketplace has taken the lack of bullish data yesterday as a reason to let the bears rule the day. The pull back in crude oil prices yesterday and this morning is showing some optimism that a peace deal may be getting closer between the US and Iran.
Friday’s thought: Worrying is like a rocking chair, it gives you something to do but it gets you nowhere!
Geoffrey Guy | 613-880-2707
Bob Orr | 613-720-1271
Tony Mitchell | 613-227-2525
Office | 613-489-0956
