The Good: The nearby soybean oil contract (September) hit a new contract high today and closed the day at 57.20 U.S. cents per pound. This rally was partially due to a record purchase of soybean oil by India. India bought 150,000 tonnes of soybean oil from China. The news was viewed as being positive, but China did sell the soybean oil at a discount. This is not good news for prices in the long term as China discounted their soybean oil price below cash palm oil values. The good news is that soybean oil futures will support canola values in the coming weeks.
The Bad: Canola futures rallied on the back of soybean oil futures with the nearby contract up by C$6.40 per tonne to settle at C$702.30 per tonne. Soybean futures dropped by two to three cents per bushel during today’s session despite the rally in soybean oil. Canola was also pressured by a 0.1 to 0.25 per cent loss in the European rapeseed futures. The bad news in canola is still trading in the range between C$690 per tonne.
The Ugly: Wheat markets continued their losing ways as spring wheat September futures set yet another contract low of US$5.78 per bushel. The spring wheat harvest is underway with one per cent of the crop in the bin. Harvest is most active in the southern growing regions of the spring wheat belt with South Dakota reporting 10 per cent of the crop in the bin. The combination of harvest pressure in the coming weeks means that spring wheat futures will likely be ugly for some time to come. The only bit of positive news is that spring wheat didn’t decline as winter wheat contracts.
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