Commodities Report
April 17, 2018

 

Close April 17

April 10

1 week change

Dec Corn

4.06

4.14

- .08

Nov Soybeans

10.45

10.48

- .03

July Wheat

4.81

5.09

- .28

June Hogs

76.75

75.05

+ 1.70

June Cattle

104.90

102.10

+ 2.80

Cdn $

79.84

79.51

+ .33

US $ Index

89.49

89.64

- .15

Crude Oil

66.30

65.54

+ .76

Gold

1350

1343

+ 7

US 10 Year Notes

120-17

120-23

- 6

TSX Stocks

15371

15265

+ 106

The largest change in the past week was the drop in wheat futures. Rain is forecast for the very dry hard red wheat areas in the Southern Plains (Kansas, Okla. areas).  USDA reported only 31 percent of US winter wheat is in good or excellent shape, but that should improve if the forecast is correct.

Soft red wheat is mostly in decent shape, and that’s the main class of wheat grown in Ontario. Hindsight tells us the rallies should have been sold. If hindsight were foresight, we’d all be a darn sight better off! World wheat fundamentals were never positive.

Three percent of US corn is planted as of April 15. Normal is five percent for that date. Little will get planted in the next 7 to 10 days. Most of the Midwest (and Ontario) is very wet, and soils are too cold for seed germination. Iowa and north still has a blanket of snow.

The market doesn’t get too concerned about planting progress unless it’s well into May. North American farmers have proven they can get a lot of crop planted in a short period of time, if conditions are right. It appears a warmer, drier period will happen by the end of April.

It is a futures market we’re dealing with, not a past market. Perhaps that’s why the soybean price has been so resilient, despite mostly negative news.

 If planting gets delayed, more soybeans will get planted. There were record US supplies at March 1. The Chinese tariff on soybeans should have also created some headwinds. Yet the soybean price is doing surprisingly well.   

Perhaps the strength is coming from the demand side. The US sold 2 boat loads of soybeans to Argentina, as they need them to meet their soymeal commitments. It appears Argentina doesn’t have the large soybean stocks that USDA says they have. The US also crushed a record number of soybeans in March. Crush margins remain good in China also.

Large spec funds are long 207,000 corn contracts and 142,000 soybean contracts. These aren’t extreme positions, so they could easily collectively be buyers or sellers from here. Weather will likely be the determining factor. Funds are still short 58,000 wheat contracts.

Outside markets were quietly higher in the past week. Livestock, metals and energy futures firmed, as inflationary pressures slowly build. This helped the Canadian dollar rally to a two month high and up 2 ½ cents in the past month. This has hurt basis values for Ontario farmers. 

- Frank Backx, Hensall Co-op Grain Marketer