Wednesday was a nice positive day for our markets. Spot corn closed up 11 3/4, spot soybeans closed up 15 1/2, harvest winter wheat closed up 17 3/4 and harvest spring wheat closed up 11 3/4. In the overnight trade corn and soybeans are now negative with the wheat sector positive. Oil closed down $1.15 yesterday at $72.62 per barrel. It is up just a bit this morning with it now trading at $72.66 per barrel. Our dollar had a low yesterday morning before noon of $0.691 US and then bounced up to $0.695 US late in the afternoon. It has eased back just a bit in the overnight trade with it currently valued this morning at $0.694 US.
Our markets rallied yesterday and were supported by a couple of different items.
- One is the continued varied weather patterns affecting the crops in South America. Rains in Brazil are keeping the soybean harvest behind the average pace and is also delaying planting the Safrinha corn crop. Limited and scattered rain events are decreasing production potential in Argentina.
- President Trump and the potential of new tariffs. The markets are trading as if the previously announced tariffs will not be put into place. The new administrations commerce secretary announced that the tariffs against Canada and Mexico can be waived if they act swiftly to stop allowing fentanyl and illegal immigrants into the US. He also stated that he thought they were acting swiftly.
Last week ethanol production in the US decreased by 8% from the previous week to come in at a production rate of 1.015 million barrels per day. The winter months are historically the lower production months for ethanol in the US. The higher price of natural gas usually in the winter makes ethanol production more costly and demand for ethanol also peaks in the summer with the stronger driving season. Production year over year remains up 4.7% which is a positive sign in the corn demand balance sheet.
The Bank of Canada decreased its benchmark interest rate yesterday by 0.25% to sit at 3.25%. They also stated that future increases would most likely be limited at this time. Separate from this the US Federal Reserve left their interest rate unchanged. It seems that our economy needs the stimulus of lower interest rates to keep things moving and on the US side they do not require this.
If you would like to talk about the markets or price some of your crop for the future or in store, please reach out to us via phone or email to info@northgowergrains.com. Prices quoted herein are for product at our elevator.
Delores Seiter | 613-880-7458
Bob Orr | 613-720-1271
Office | 613-489-0956
