The Good: There was little in the way of good news in the markets today, but spring wheat did manage to eke out a gain of one cent per bushel. The good news is that winter wheat markets closed down during the day. Kansas City futures were off by six to seven cents per bushel. Chicago wheat futures were off by three to four cents per bushel during today’s trading action. The fact that spring wheat could finish higher against the backdrop of lower wheat markets is good news for Minneapolis futures.
The Bad: Canola closed down by C$5.70 per tonne to settle at C$646 per tonne. The bad news is that canola futures closed at the lowest level since the middle of April. This leaves the November contract vulnerable to a sell off down the C$620 to C$630 per tonne level. Soybean oil futures dropped by three per cent during today’s trading session. Soybean futures closed down by seven to eight cents per bushel which also pressured canola markets. This certainly was a bad day for oilseed markets including canola.
The Ugly: The Canadian dollar moved down by 0.39 per cent today and settled at the lowest level since mid May. The dollar closed the session at 72.23 U.S. cents. The Canadian dollar was under pressure from a drop in the inflation rate in July to 1.7 per cent. This is in the middle of the 1 to 3 per cent target range by the Bank of Canada. The core inflation rate remained high at 3.1 per cent which is slightly above the target range. The tame inflation data increased the odds of a reduction in the Bank of Canada rate. That is causing the loonie to weaken to support levels not seen since earlier this year.
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