North Gower Grains

Wednesday was another negative day for our markets.  Harvest corn closed down 6 3/4, harvest soybeans closed down 10 1/2, harvest winter wheat closed down 15 3/4 and harvest spring wheat closed down 10 1/2.  In the overnight trade corn, soybeans and winter wheat remain on the negative side with spring wheat now positive.  Oil closed up $2.26 yesterday at $96.02 per barrel.  It is weaker this morning with it now trading at $93.50 per barrel.  Our dollar started out yesterday morning at $0.722 US and then trended lower going down to $0.718 US in the overnight trade.  It has bounced back up some this morning with it currently valued at $0.720 US.

Our markets grinded lower again yesterday with managed money liquidating more and more of their long position.   As they build a long position it helps to support prices however once they start to liquidate the long position it helps to push prices lower and quicker then normal supply / demand fundamentals would suggest. 

Soybeans were unable to break back to the positive side even with the Deputy Agriculture Secretary in the US stating that he expects China to honour its pledge to buy more American soybeans this year.  He also stated that China has started placing orders for soybeans for this fall which would go towards their (still unconfirmed) pledge to purchase 25 million tonnes of new crop soybeans from the US. 

Weekly ethanol production in the US increased by 2% last week from the previous week.  This resulted in daily production of 1.108 million barrels of ethanol.  Blender demand decreased slightly last week however exports increased.  The net result was that ethanol stocks decreased by 1.4% down to 24.61 million barrels.  Thankfully the ethanol grind remains strong which continues to provide support to the corn market.

Current weather and the short-term forecast in the US continue to support crop growth.  Without some significant positive news our markets will likely continue to move lower.  As we have said many times our markets need China to become an active purchaser, not just a rumoured purchaser that is placing orders.  Hopefully the negative trend will end soon for our markets.  

Geoffrey Guy | 613-880-2707