FarmLead Breakfast Brief
Thursday, November 24th, 2016
“Crap has always happened, crap is happening, and crap will continue to happen.”
– Chuck Palahniuk
At 7:00 AM CDT, all North American futures markets (*not cash prices*) are closed or unchanged. CBOT values listed are where they closed last night.
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3473 CAD, $1 CAD = $0.7422 USD)
Mar Corn: $3.593 USD or $4.84 CAD
Jan Soybeans: $10.343 USD or $13.935 CAD
Jan Soybean Meal (per short ton): $318.60 USD or $429.26 CAD
Jan Soybean Oil (cents per lbs): 37.14¢ USD or 50.04¢ CAD
Mar Oats: $2.233 USD or $3.008 CAD
Mar Wheat (Chicago): $4.238 USD or $5.841 CAD
Mar Wheat (Kansas City): $4.335 USD or $5.841 CAD
Mar Wheat (Minneapolis): $5.263 USD or $7.09 CAD
Jan Canola: unchanged at $8.888/bu / $391.88/MT USD or $11.975/bu / $528/MT CAD
Yesterday’s Winnipeg ICE Close
Mar Barley: unchanged at $2.173 USD or $2.928 CAD
Mar Milling Wheat: +2.7¢ (+0.45%) to $4.767 USD or $6.423 CAD
While we’ve seen oilseeds climb lately on good demand and South American production concerns, the market got a nice US Thanksgiving present from the U.S. Environmental Protection Agency on Wednesday. More specifically, the EPA raised the biofuel quota to 19.3 Billion gallons, including 15B gallons of ethanol, both new records. The larger-than-expected numbers and the fact that it was released late in the day right before the U.S. Thanksgiving holiday caught the market completely off-guard (unlike the U.S.D.A., the EPA doesn’t have a set-in-stone schedule of when they’ll report). As such, soyoil hit went limit up and hit its highest level since July 2014 while palm oil in Malaysia touched a 4-year higher. With the thought that vegetable oil carryout could now be tighter, January canola nearly touched $530/MT, highs not seen since mid-June and accordingly, we took advantage of continued opportunities to make sales (here’s some bids on FarmLead to negotiate on. P.S. a posted price is not a closing price.)
Ironically, the European Union is considering cutting the proportion of the bloc’s renewable energy target that biofuels have from 7% in 2021 to 3.8% by 2030. Granted, this is a long way off, the implications would be a smaller amount of feed byproducts that are produced, meaning the E.U. would potentially have to import more (they’re already the world’s largest meal importer, importing about half their annual demand, or 27.6M tonnes). The opposite could be said for the U.S. now with a bigger ethanol mandate as of yesterday, meaning more competition in the feed markets between all this corn and wheat already available to livestock producers. On that note though, American winter wheat acres are definitely going to be lower in 2017/18 (some say the lowest in 50 years) but there is a lot of it and similar acreage is expected in places like the E.U., Russia, and Canada next year.
In the broader markets, Iran is optimistic that the O.P.E.C oil production cuts are going to happen but we’ve heard this tune whistled many times before and we’ll have to see if this one is actually good. If that’s the case, this will help oil prices climb a bit, which would in turn be supportive of the Canadian Loonie. Now, I’m not expecting oil to jump back to $100 / barrel anytime soon but it will be off the languishing lows of $40-$50 it’s been hanging around lately. However, many banks are forecasting the Canadian Loonie to soften a bit in 2017, possibly down to 70 cents USD, due to oil prices potentially staying low (assuming now OPEC production cut), the U.S. economy and U.S. dollar remaining strong, and an impending U.S. interest rate increase.
Happy Thanksgiving to our American friends and with that in mind, I won’t be writing the Breakfast Brief tomorrow (unless there’s another unexpected announcement, I guess) but you can catch my weekly grains market wrap-up later in the day on RealAgriculture.com.
COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.