Crop futures fell Monday, but it was hard to tell whether that was just due to overall commodity market weakness or signs of traders clearing the decks before tomorrow’s U.S. Department of Agriculture reports are released.
Soybean oil was weak, soybean meal was strong, soybeans were off a little and canola came in a bit weaker than soybeans but stronger than soybean oil, which is about as neutral a position as it could have.
Oats fell over five percent in value, to $1.99 per bushel, breaking the possibly important psychological barrier of $2.
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Crop futures have been in a multi-week strengthening period but still sit at much lower levels than during the boom years.
The USDA reports will have everyone’s eyes Tuesday and can be market movers, even without shocking changes to the outlooks and fundamental situation.
FarmLink Marketing analyst Jon Driedger says that’s due to the amount of data released and the potential of the market to pivot into a new phase.
“I don’t know if anyone’s looking for dramatic changes … but you get this culmination of a bunch of information on one day. You set yourself up potentially for some surprises or a recalibration,” said Driedger in an interview.
“You’re in a window where there’s not a lot of fresh news.… The old crop news is mostly known. It’s a little too early to get wound up by seeding or new crop weather.”
Traders and analysts have closely watched U.S. crop export numbers to assess world demand and U.S. stocks, so Tuesday’s numbers should confirm or challenge market views. Also, a better assessment of the 2015 crop should be possible.
The January reports have sparked dramatic market action, but while one factor makes that a potential this time, another makes that potential difficult to manifest.
Playing against hopes for a dramatic reaction is the fact that all major crops are well supplied. A few million bushels changed in the supply and demand tables should not create either a shortage nor a much more greatly overburdened situation. The ability of USDA now to suddenly change the outlook by major percentages is poor.
However, speculative funds are heavily short after having bet against the market in recent weeks and months, so anything that swings the bias away from bearishness and towards bullishness could have an outsized affect as traders roll out of their shorts, Driedger said.
“I’m as interested in the response to the reports as in the numbers themselves,” said Driedger, seeing Tuesday as the set-up for the next two-and-a-half months.
Any bullish reaction could be weak, though, unless crude oil finds some feet. Monday oil futures tanked, falling over five percent, and the lead weight of weak oil restrains the ability of crop futures to move independently higher by much.
Stock markets had another poor day, falling again, in a continuation of the trend that has made 2016 awful so far for stocks.
Contact ed.white@producer.com
Light crude oil nearby futures in New York were down $1.75 to US$31.41 per barrel.
The Canadian dollar at noon was US70.40 cents, down from 70.67 cents the previous trading day. The U.S. dollar at noon was C$1.4205.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jan 2016 470.10 -3.10 -0.66%
Canola Mar 2016 478.40 -2.90 -0.60%
Canola May 2016 485.80 -2.80 -0.57%
Canola Jul 2016 490.10 -3.10 -0.63%
Canola Nov 2016 488.40 -1.80 -0.37%
Milling Wheat Mar 2016 0.00 +2.00 +-100.00%
Milling Wheat May 2016 0.00 +2.00 +-100.00%
Milling Wheat Jul 2016 0.00 +2.00 +-100.00%
Durum Wheat Mar 2016 0.00 unch 0.00%
Durum Wheat May 2016 0.00 unch 0.00%
Durum Wheat Jul 2016 0.00 unch 0.00%
Barley Mar 2016 0.00 unch 0.00%
Barley May 2016 0.00 unch 0.00%
Barley Jul 2016 0.00 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jan 2016 881 +1.5 +0.17%
Soybeans Mar 2016 861.25 -4 -0.46%
Soybeans May 2016 864 -4 -0.46%
Soybeans Jul 2016 870.25 -4.5 -0.51%
Soybeans Aug 2016 872.5 -4.5 -0.51%
Soybeans Sep 2016 871.75 -4.5 -0.51%
Soybean Meal Jan 2016 268.8 +0.9 +0.34%
Soybean Meal May 2016 272.3 +1.1 +0.41%
Soybean Oil Jan 2016 29.08 -0.37 -1.26%
Soybean Oil Mar 2016 29.25 -0.39 -1.32%
Soybean Oil May 2016 29.48 -0.4 -1.34%
Corn Mar 2016 351.75 -5.25 -1.47%
Corn May 2016 357.5 -5.25 -1.45%
Corn Jul 2016 363.5 -5.5 -1.49%
Corn Sep 2016 369.5 -5.25 -1.40%
Corn Dec 2016 378.5 -4.5 -1.17%
Oats Mar 2016 199 -11.75 -5.58%
Oats May 2016 199 -12.75 -6.02%
Oats Jul 2016 203.5 -12.75 -5.90%
Oats Sep 2016 209 -12.75 -5.75%
Oats Dec 2016 207.25 -13.75 -6.22%
Wheat Mar 2016 469 -9.5 -1.99%
Wheat May 2016 474.5 -9.25 -1.91%
Wheat Jul 2016 481 -9.25 -1.89%
Wheat Sep 2016 490.5 -9.25 -1.85%
Wheat Dec 2016 504 -9.5 -1.85%
Minneapolis
Spring Wheat Mar 2016 493.25 -7.75 -1.55%
Spring Wheat May 2016 500.5 -7.5 -1.48%
Spring Wheat Jul 2016 509.75 -7 -1.35%
Spring Wheat Sep 2016 520.75 -7 -1.33%
Spring Wheat Dec 2016 536.5 -6.75 -1.24%
Kansas City
Hard Red Wheat Mar 2016 462.25 -10.5 -2.22%
Hard Red Wheat May 2016 472.25 -10.25 -2.12%
Hard Red Wheat Jul 2016 482 -10.25 -2.08%
Hard Red Wheat Sep 2016 495.75 -10 -1.98%
Hard Red Wheat Dec 2016 514.75 -10.75 -2.05%
