Thursday was a nice positive day for our markets. Harvest corn closed up 8 1/4, harvest soybeans closed up 22, harvest winter wheat closed up 5 1/4 and harvest spring wheat closed up 1 3/4. In the overnight trade all of our markets have fallen back onto the negative side. Oil closed up $1.58 yesterday at $71.92 per barrel. It is weaker this morning with it currently priced at $69.34. Our dollar started out yesterday morning at $0.702 US and has traded mostly higher since then. This morning it is currently valued at $0.705 US.
Our markets jumped up yesterday with talk that a heat wave is going to hit most of the US Corn Belt next week. We should also note that in Europe they are currently experiencing their own heat wave with reports that it is damaging some of their growing crops. In the US it is thought that the heat wave coming might be damaging some crops but will also help other areas by drying up some wet areas. With the markets pulling back this morning we can see that the potential weather issue coming up will only drive prices if it is extended and is shown to be hurting crop growth.
The potential of China purchases of US crops is the elephant in the room that bullish traders are looking at. They can quickly change our markets both by their purchases and/or lack of purchases. We should note that the US soybean crush is expected to utilise 61.2% of their domestic supply of soybeans this marketing year with exports only at 36.3% of the supply. Just a couple of years ago the crush market utilised less than 50% of the supply. The shift in this market should bring more price stability as more and more soybean oil is required for the domestic biodiesel usage.
President Trump has come out with an additional $11 billion dollars for the US farmers. He is also requesting that the E15 ethanol blend be mandated for the full year not just the temporary measures that their government has legislated in the past. They continue to subsidize their farmers. The playing field between them and us keeps getting more imbalanced all the time.
There is also some talk that Iran will be purchasing increased US agricultural goods as part of the current peace plan. Of course this just could be more hot air out of President Trump. Prior to the war Iran was usually a purchaser of some goods from the US which would include corn.
Friday’s thought: If you have the chance to make people happy, just do it. Maybe your act of kindness can make their day. Have a great weekend everyone.
Geoffrey Guy | 613-880-2707
Bob Orr | 613-720-1271
Tony Mitchell | 613-227-2525
Office | 613-489-0956
