North Gower Grains

Thursday was a mostly positive day for our markets.  Spot corn closed up 3 1/4, spot soybeans closed up 9 1/4, harvest winter wheat closed up 1 1/2 and harvest spring wheat closed down 3 1/4. In the overnight trade corn and wheat sector are negative with soybeans still on the positive side.  Oil closed up $0.22 yesterday at $88.90 per barrel.  It is weaker this morning with it now trading at $87.35 per barrel.  Our dollar started out yesterday morning at $0.721 US and then went up to $0.726 US early in the afternoon.  It has pulled back a bit since then with it currently valued this morning at $0.724 US. 

Soybean prices came back up yesterday and were supported by the demand side of the balance sheet for both soybean meal and soybean oil.  The nearby price on the CBOT has also reached a technical support level in the $11.70 to $11.90 per bushel range.  Of course this market is waiting to see if (and when) China is going to step up with soybean purchases from the US.  The longer they stay away from these purchases the better the chance that soybean prices will fall lower. 

Weekly ethanol production in the US decreased last week by about 2% from the previous week.  They still produced 1.089 million barrels per day of ethanol which if averaged over the full marketing year would utilise 5.60 billion bushels of corn.  Blender demand was up for the week with exports decreased.  Net result was that ethanol stocked increased week over week to sit at 25 million barrels.  With the current high price of crude oil ethanol remains very attractive for fuel blending. 

HRW wheat prices in the US have fallen for 5 of the last 6 trading days.  This is in spite of the weakened crop ratings released earlier this week in the US.  World prices are significantly lower than current US prices and it is possible that this spread just got too large and is pulling back to a more realistic premium. 

It has been reported that the US and Iran have agreed to a 60 day extension to the current ceasefire.  This is supposed to allow time for both parties to negotiate a formal end to the war.  It has also been reported that President Trump is yet to sign off on the new agreement.  We should expect crude oil prices to pull back if the new extension does hold.  How this will affect our markets going forward is yet to be seen.

Friday’s thought: The entire point of life is to take chances on dreams that seem crazy to most, but feel like destiny to you!

Geoffrey Guy | 613-880-2707