Storms in two areas of the world were the big fundamental factor in grain markets over the holiday period.
You might have heard about the winter storm that shut down the airport at Denver, Colorado, for a couple of days before Christmas.
The snow that stalled transportation in the Mile High City also hit western Kansas and parts of Oklahoma, helping to lessen their moisture deficit.
A second storm delivered more snow and rain just before the New Year.
Large parts of the United States winter wheat crop had gone into winter with dry soil. The situation has improved, particularly in Kansas, but parts of Oklahoma and Nebraska remain dry.
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The moisture’s potential to raise yields weakened wheat futures prices, but the mud and cold supported cattle futures on the expectation that it would slow livestock weight gains.
The other news-making storm delivered torrential rain to Indonesia and Malaysia causing much mayhem and disrupting palm oil processing.
That drove up palm oil prices and supported the rest of the vegetable oil complex, including canola. It generated a nice price rebound after a sag in the first half of December.
Also supporting canola values was a strong export program.
The Vancouver vessel schedule for the first half of January shows that in addition to the usual business with Japan, China is taking several shiploads. Pakistan is also taking a load. Country bids climbed to around $8 per bushel in the last week of the year.
Just for comparison, at the end of December last year, the January Winnipeg canola futures contract was about $230 per tonne. This year it was trading around $370.
Brazil’s soybean regions have also been getting lots of rain.
This sets up the newly planted crop for good growth, but also increases the potential for the spread of Asian soybean rust, a disease that in the past has taken a heavy toll on yield.
