The market has taken a bit of a breather from the recent impressive two-month crop rally and market watchers are wondering where it could go from here.
However, the first trading day of May gave little indication, with crop futures barely changed. Only soybeans and soybean meal moved much.
Soybean meal strength helped soybeans futures rise, but weakness in soybean oil values hurt canola, which closed mixed with old crop down but new crop up slightly.
Officials in Argentina continue to assess the soybean crop damage from torrential rain at harvest. Today the country’s weather agency estimated that 15 percent was wiped out, lowering the crop by nine million tonne. Last week, the Buenos Aries Grain Exchange cut its estimate by four million tonnes.
After the market closed, the USDA said that 45 percent of U.S. corn was seeded as of May 1, ahead of the five year average of 30 percent.
In soybeans, eight percent was seeded, ahead of the average of six percent.
The winter wheat crop was 61 percent good to excellent, up from 59 percent the week before. The five-year average is 43 percent.
Crop futures have roared higher since the beginning of March as money flowed back into the until-recently shunned commodity markets.
“It’s caught people by surprise,” said Mike Krueger of Fargo, North Dakota’s The Money Farm.
“It’s been a shift away from equities into commodities.”
Since bottoming out at the beginning of March, soybeans futures have soared more than $1.75 per bushel, corn has risen more than 30 cents, spring wheat is up over $1.50 and canola is up over $50 per tonne.
Crude oil has been rising since hitting January-February lows, and gold has been rising since December-January lows.
Why commodities have been rallying has been the source of much discussion.
Most analysts believe equity markets are overvalued after a long, long rally, especially with weakening world economic performance. Much of the aggression in commodity investment could be due to investors taking money out of overbought stocks and putting it into oversold commodities.
Regardless of the source, commodities have been rising and crops have been carried along with the rise.
There are fundamental factors too, with harvest damage to Argentine soybeans and pollinating damage to second-crop corn in Brazil creating uncertainty over South American supplies.
U.S. corn seeding has been going well and is well above average progress. U.S. wheat development is good too, pressuring the prices for that crop.
Light crude oil nearby futures in New York were down $1.14 cents to US$44.78 per barrel.
The Canadian dollar at noon was US79.69 cents, unchanged from 79.69 cents the previous trading day. The U.S. dollar at noon was C$1.2548.
The Toronto Stock Exchange’s S&P/TSX composite index closed down 85.82 points, or 0.62 percent, at 13,865.63. J
The Dow Jones industrial average closed up 117.52 points, or 0.66 percent, to 17,891.16, the S&P 500 gained 16.13 points, or 0.78 percent, to 2,081.43 and the Nasdaq Composite added 42.24 points, or 0.88 percent, to 4,817.59.
Winnipeg ICE Futures Canada dollars per tonne
Canola May 2016 498.70 -0.50 -0.10%
Canola Jul 2016 499.70 -1.30 -0.26%
Canola Nov 2016 496.00 +1.50 +0.30%
Canola Jan 2017 499.60 +1.80 +0.36%
Canola Mar 2017 500.40 +1.00 +0.20%
Milling Wheat May 2016 240.00 +4.00 +1.69%
Milling Wheat Jul 2016 238.00 +1.00 +0.42%
Milling Wheat Oct 2016 233.00 +1.00 +0.43%
Durum Wheat May 2016 303.00 unch 0.00%
Durum Wheat Jul 2016 298.00 unch 0.00%
Durum Wheat Oct 2016 293.00 unch 0.00%
Barley May 2016 172.00 unch 0.00%
Barley Jul 2016 174.00 unch 0.00%
Barley Oct 2016 174.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans May 2016 1035.5 +14.5 +1.42%
Soybeans Jul 2016 1043.75 +14 +1.36%
Soybeans Aug 2016 1044 +13.5 +1.31%
Soybeans Sep 2016 1029 +11.75 +1.16%
Soybeans Nov 2016 1017.75 +10 +0.99%
Soybeans Jan 2017 1019.25 +10.25 +1.02%
Soybean Meal May 2016 345.3 +13.2 +3.97%
Soybean Meal Jul 2016 347.3 +12.5 +3.73%
Soybean Meal Aug 2016 345 +10.8 +3.23%
Soybean Oil May 2016 32.19 -0.69 -2.10%
Soybean Oil Jul 2016 32.5 -0.64 -1.93%
Soybean Oil Aug 2016 32.63 -0.63 -1.89%
Corn May 2016 390.25 unch 0.00%
Corn Jul 2016 391.75 unch 0.00%
Corn Sep 2016 392.25 +0.5 +0.13%
Corn Dec 2016 396.5 +1.25 +0.32%
Corn Mar 2017 404.5 +1.75 +0.43%
Oats May 2016 192.25 -1.25 -0.65%
Oats Jul 2016 205.5 -0.25 -0.12%
Oats Sep 2016 214.25 +0.25 +0.12%
Oats Dec 2016 223.5 +1.5 +0.68%
Oats Mar 2017 233.25 +1.25 +0.54%
Wheat May 2016 477 -1 -0.21%
Wheat Jul 2016 487.75 -0.75 -0.15%
Wheat Sep 2016 498.5 +0.25 +0.05%
Wheat Dec 2016 516.75 +0.75 +0.15%
Wheat Mar 2017 534 +1 +0.19%
Minneapolis
Spring Wheat May 2016 544 +4 +0.74%
Spring Wheat Jul 2016 548.75 +1.75 +0.32%
Spring Wheat Sep 2016 557.25 +2.25 +0.41%
Spring Wheat Dec 2016 567.75 +2.25 +0.40%
Spring Wheat Mar 2017 575.5 +1.75 +0.31%
Kansas City
Hard Red Wheat May 2016 461 -4.25 -0.91%
Hard Red Wheat Jul 2016 474.25 -4.25 -0.89%
Hard Red Wheat Sep 2016 490 -4.25 -0.86%
Hard Red Wheat Dec 2016 514 -4.25 -0.82%
Hard Red Wheat Mar 2017 528.75 -4.25 -0.80%
