The Good: The bleeding in the nearby spring wheat contract finally turned around with a five cent gain in the nearby contract. The September contract closed the day at US$5.91 per bushel. The spring wheat contract was dragged higher by stronger winter wheat markets with both Kansas City and Chicago wheat markets increasing by seven to eight cents per bushel. The good news is that wheat was supported by reductions in the Russian crop and export forecast. The reductions were relatively minor, but the market rebounded sharply.
The Bad: The canola market closed lower for the second consecutive day with the November contract closing down by C$4.10 per tonne. November canola closed the day at US$690 per tonne. The losses in canola were caused by pressure from the soybean and soybean oil market. The soybean oil market closed down by 0.77 per cent on the day, while soybean futures were off by one to three cents per bushel. The outlier today was the European Matif rapeseed contract which closed up by 0.4 per cent. The bad news is that canola followed the general vegetable oil complex rather than the Matif rapeseed contract.
The Ugly: The corn market had an ugly day with the nearby September contract closing down by five cents per bushel in today’s trade. This pushed the contract below the psychological US$4.00 per bushel level. The contract closed the day at US$3.99 per bushel with today’s loss the second consecutive decline in the contract. Weakness is corn is related to the mostly good to excellent conditions reported in the main Corn Belt. The ugly news is that corn is in a carry market where the deferred contracts are higher than the nearby contract. What usually happens in a carry market is that when the nearby contract September ends, the December contract will converge to the value of the September contract.
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