Grains Matter Chatter – Episode 229
Wednesday was a mixed day for our markets. Harvest corn closed down 3/4, spot soybeans closed up 3/4, spot winter wheat closed up 1/2 and spot spring wheat closed unchanged. In the overnight trade all of our markets are hovering around even. Oil closed up $1.70 yesterday at $70.29 per barrel. It is stronger in trading again this morning with it now valued at $70.37 per barrel. Our dollar started out yesterday morning at $0.705 US and then went up to $0.708 US before noon. It has traded within that range since then with it currently valued this morning at $0.706 US.
The markets were unable to sustain the positive vibe from Tuesday yesterday with all of our commodities closing out at or near the bottom of their trading range for the day. This was somewhat disappointing as the bullish news from the USDA report is already being treated as old news. The marketplace seems to be fixated on the favourable growing conditions in South America that will most likely bring the record crop that is now forecasted.
This morning much of the same is occurring in our markets with prices not really moving in any direction. This is of course better than a negative move but we need prices to move higher to get the Christmas Rally that we all were hoping for.
Some positive news around the world for the global wheat market yesterday. India has tightened up inventory controls to keep a steady supply for their domestic market. It seems some traders were building inventory levels and this was driving up domestic prices. In Russia there are already talks of less spring wheat acres being planted next year as their farmers look to grow more profitable crops.
The Bank of Canada did decrease their benchmark interest rate by 50 basis points yesterday. In theory this should weaken our Canadian dollar but the exact opposite occurred for at least yesterday. This was just another example of the markets not reacting how the analysts will say they should.