Commodities Report

October 31, 2017

 

Close Oct 31

Oct 24

1 week change

Dec Corn

3.46

3.53

- .07

Nov  Soybeans

9.74

9.76

- .02

Dec Wheat

4.19

4.38

- .19

Dec Hogs

68.00

64.05

+ 3.95

Dec Cattle

125.65

119.55

+ 6.10

Cdn $

77.58

78.86

- 1.28

US $ Index

94.53

93.95

+ .58

Crude Oil

54.38

52.40

+ 1.98

Gold

1271

1278

- 7

US 10 Year Notes

124-30

124-24

+ 6

TSX Stocks

16026

15907

+ 119

Grains were weaker over the past week, with wheat the biggest loser. For the month of October, wheat  also dropped the most, 29 cents, while corn lost 9 cents and soybeans gained 6 cents. Dominating the price action was the large speculative funds who have been large sellers in corn and wheat, while they have been buyers of soybeans lately.

Prices remain confined to recent ranges on the weekly and monthly charts. Corn bottomed in August 2016 at 3.01, and the recent high was 3.94 this past July. The current 3.46 price is almost exactly at the half way point of that range.

Wheat also bottomed in August 2016 and hit its high in July 2017. It’s range was $1.96, as it went from $3.60 to 5.56, in that rally. We are nearer the bottom of that range now, with prices at 4.19, but that is still nicely above the 3.60 low.

Soybean’s recent low was 9.00, in June of this year. The market rallied to 10.28 in a 2 ½ week, unexpected and brief rally. At 9.74 now, they are well over the half way mark of that range. So while fundamentals have deteriorated, prices are holding respectably.

Corn harvest remains slow in the US, with only 54 percent off as of Oct. 29. Normal is 72 percent. Soybean harvest is near normal at 83 percent done. Corn harvest is moving slowly in Ontario also due to intermittent rains.

Livestock markets showed strong gains again in the past week, extending the rally that started in August. Cattle are up 20 cents per pound from that low, while hogs have added over 12 cents per pound. Also helping profitability in that sector is the fall in the Canadian dollar since early September.

The Canadian dollar is now down over main 5 cents from its recent peak at 82.93 on Sept. 8. This has been the main contributor towards soybeans being over $12.00 per bushel again, fob farm. New crop harvest prices are also well above $12.00 again. That is a level that should encourage some farmer selling. While it’s not a get rich quick price, it should pay the bills and then some.

The US dollar index remains firm, as the very strong US stock markets encourages investors from all over the world to buy US stocks. They are encouraged by Trump’s plans to cut the corporate tax rate significantly, which would obviously lead to more company profits. No one talks about how much it could add to government deficits. 

 

 

- Frank Backx, HDC Grain Marketer