Commodities Report

November 9, 2016

 

Close Nov 8

Oct 25

2 week change

Dec Corn

3.54

3.49

+  .05

Jan Soybeans

10.11

9.91

+ .20

Dec Wheat

4.15

4.04

+.11

Dec Hogs

47.00

44.60

+ 2.40

Dec Cattle

102.60

103.90

- 1.30

Cdn $

75.23

75.02

+ .21

US $ Index

97.97

98.69

- .72

Crude Oil

44.89

49.90

- 5.01

Gold

1274

1276

-2

US 10 Yr Notes

129-16

130-05

-21

TSX Stocks

14657

14896

-239

Grains were slightly better compared to two weeks ago. Continued strong export demand offset the strong yields which USDA will update tomorrow, Nov. 9. Record corn for ethanol grind and soybean crush also helped.

Most think the soybean yield will again be ratcheted higher, but the carry out will be raised by less, as demand is also raised. The corn yield is expected to remain unchanged, which will still be a new record.

Harvest is progressing normally. Once again, the biggest yields are in the western Midwest. Basis remains lower in those areas. Luckily for Ontario corn farmers, our basis is set by what it costs to bring in corn from the higher eastern corn basis values.

It is still early in the South American production cycle, but there are already some problems in key Argentina areas, where it is too wet to plant. Brazil planting, however, is ahead of the normal planting pace in most areas, including the key state of Mato Grosso.

Outside markets sent mixed signals for grain prices. The US dollar weakened, (positive for commodities) but so did crude oil (negative for grains). Currencies were also mixed, with our dollar slightly higher.

Markets were generally range-bound, awaiting the outcome of the US election. Most feel a Trump win would add to volatility, and be more negative for markets than a Clinton win. Clinton was leading in most polls.

Stock markets had larger swings than most other markets. US economic data was better, especially in the important labor and housing sectors. The Bank of Canada continues to hint that our economy is struggling.

It is unlikely our interest rates will rise even if the US raises theirs in Dec., as many expect. This should keep our dollar under pressure, and help local basis values. 

 

- Frank Backx, HDC Grain Marketer