Additional support came from U.S. weather and escalated fighting between Russia and Ukraine.

The most-active  July soybean contract on the Chicago Board of Trade settled up 5-1/2 cents at $10.57-1/4 a bushel. July wheat ended up 9-1/4 cents at $5.54-3/4 a bushel, having hit its highest point since May 21, and July corn added three cents to finish at $4.42-1/2 a bushel.

U.S. President Donald Trump and Chinese leader Xi Jinping confronted weeks of brewing trade tensions in a rare leader-to-leader call on Thursday. Trump said on social media the talks, which focused primarily on trade, led to “a very positive conclusion,” announcing further lower-level bilateral talks.

China is by far the world’s biggest soybean buyer.

Weather forecasts also added support, said Karl Setzer, partner at Consus Ag Consulting.

“We are finally seeing some risk premium added in,” said Setzer.

Rains helped improve soil moisture in parts of the U.S. Southern Plains and the Midwest, according to weather forecaster Vaisala. But dryness lingers in north central Kansas, southeastern Nebraska, Iowa, southern Minnesota, northern Illinois, northern Indiana and western Ohio, according to the forecaster. That dryness could stress germination and early growth of corn and soybeans.

Meanwhile in wheat, temperatures have been below normal in the Plains this week, slowing winter wheat maturation, Vaisala said.

And, in the war between leading wheat suppliers Russia and Ukraine, fighting intensified, with Russia launching an intense missile and drone barrage at the Ukrainian capital Kyiv in the early hours of Friday.

The post U.S. grains: Chicago futures firm on weather, U.S.-China trade optimism appeared first on Canadian Cattlemen.

“There’s still potential for more downside… the weather looks fantastic,” according to Terry Reilly, senior agricultural strategist with Marex in Chicago, although he added that price levels were getting to the point that could start bringing in more end user buying interest. Poor export demand for soybeans, along with large speculative short positions in soybeans and corn were adding to the negative undertone in the futures.

He expected September corn could fall as low as US$3.70 per bushel before finding support, with a downside target of US$3.85 in the December contract. For soybeans, Reilly expected the November contract “could easily test” US$9.75 to US$9.80 per bushel.

Barring a weather scare, any recovery in the futures will likely depend on outside geopolitical events, according to Reilly who pointed to the ongoing conflict in Ukraine and rising tensions in the Middle East as things to watch.

Wheat has the most potential to the upside, according to Reilly, due to weather problems in France and persistent dryness for spring wheat in the Canadian Prairies. He placed support in the nearby Chicago futures at the psychological US$5.00 per bushel level.

The post CBOT weekly: Good weather weighs on soybeans/corn, with more room to downside appeared first on Canadian Cattlemen.

“Corn acres are to be down a couple of million from last year and soybean acres are to be up, with larger stocks [for both] as well,” Strommen said.

He pegged U.S. corn acres for 2024/25 at 91 million to 92 million, with soybeans around 87 million. He noted that the planted wheat area was likely to be lower as well at about 40 million acres.

Ending stocks are expected to increase for the most part during the coming crop year. Strommen placed those for corn at about 2.30 billion to 2.40 billion bushels, higher than the USDA’s estimate of 2.17 billion for the 2023/24 crop. For soybeans, the carryover was projected to be 350 million to 400 million bushels compared to this year’s 315 million. The carryout for wheat was projected to go either way at 600 million to 700 million bushels, compared to the 658 million for 2023/24.

Strommen said prices for the three commodities might not continue to grind lower, pointing out “we’re at contract lows pretty early in the season.”

“We’ll have some acre competition. Usually we have some kind of a spring rally,” he continued, noting the U.S. dollar was at or near three month highs which was a major factor in driving prices lower.

Another major factor Strommen pointed to were the very large short positions in corn and wheat, and soybeans to a lesser extent, held by the speculative funds.

“They need some positive news to their minds and reverse their trend to the top side,” he stated.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

The post CBOT weekly outlook: Bearish picture for commodities appeared first on Canadian Cattlemen.

As of Nov. 28, 2023, the net managed money short position in canola futures came in at 81,770 (6,918 long/88,688 short), a decrease of about 5,000 from the previous week.

Open interest in the canola market came in at 256,563 contracts, which was down by 8,732 on the week.

At the Chicago Board of Trade, fund traders were on the other side of the market, liquidating some of their large net long position in soybeans, taking it to roughly 71,100 contracts from 85,800 the previous week.

Meanwhile, the net short position in corn was up by about 11,000 contracts, coming in at about 212,000 contracts as traders added new shorts and liquidated some longs.

In wheat, the Chicago soft wheat market reported a net short position of about 124,000 contracts. The net short in Kansas City hard red winter wheat came in at roughly 49,700 contracts.

In Minneapolis spring wheat, managed money traders were holding a net short of around 29,100 contracts, which was up by just over 1,000 contracts on the week.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

The post Net fund short position edges down in canola appeared first on Canadian Cattlemen.

The average trade guess for wheat going into this month’s report was approximately 570 million bushels, he said, which is down roughly by 36 million from 2022-23.

“That’s likely given the drought stress the Kansas City winter wheat crop has gone through,” Lilja said.

Reports said the average trade estimates for 2023-24 corn ending stocks was at 2.25 billion bushels, up slightly from the 2.22 billion in May.

“A lot of that will be a cut in export projections,” Lilja noted.

As for new-crop soybeans, the analyst forecast ending stocks to be around 345 million bushels. That would make for a 10 million-bushel increase from last month.

— Glen Hallick reports for MarketsFarm from Winnipeg.

The post CBOT weekly outlook: Ending stocks of corn, soy predicted to rise appeared first on Canadian Cattlemen.

The U.S. Department of Agriculture (USDA) reported on May 30 that 92 per cent of the country’s corn crop was planted as of Sunday, as well as 83 per cent of the soybean crop and 85 per cent of spring wheat. Compared to their respective five-year averages at this time of year, corn and soybeans are eight and 18 points ahead, respectively. Spring wheat is only one point behind despite delayed plantings earlier this spring due to cool and wet weather. 

USDA on Tuesday also released its first corn crop rating of the season, which was at 69 per cent good to excellent. 

Ryan Ettner, trader at Allendale Inc. in McHenry, Ill., said the quick seeding is pulling prices down. 

“That’s contributed to a good portion (of activity),” he said. “I guess (the corn rating) is in the middle when you look back at the past 20 to 30 years. Those two things combined, and weather maps that put rain for two-thirds of the growing areas, have also done enough to keep moderate pressure, day to day.” 

The U.S. House of Representatives was set to vote on raising the country’s debt ceiling on May 31 in order to avoid a catastrophic default. Ettner said while the current negotiations have impacted crude oil prices, agricultural commodities were mostly immune. 

“Crude is pre-selling in case (the motion) isn’t passed and there’s an economy slowdown,” he said. “You see the stock market due the same, but not quite at the same level as crude oil.” 

Ettner added that low export sales for corn and soybeans are also putting pressure on prices and he expects the USDA to make cuts in its next World Agricultural Supply/Demand Estimates (WASDE) report on June 9. But overall, it is still a weather market. 

“As long as the weather maps don’t offer anything too shocking, and they haven’t done so at all this year yet,” he said. “We had a nice bounce last week and then a setback to start this week, but now we should turn to a very slow grind lower.” 

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

The post CBOT weekly outlook: Quick seeding bringing down prices  appeared first on Canadian Cattlemen.

Ryan Ettner, broker for Allendale Inc. in McHenry, Ill., said there was optimism on the markets last week when trade representatives from both nations restarted talks. With the countries’ current deal expiring at the end of 2021, murmurs of its extension are having a bullish effect.

“We’ve only just begun talking with China about any potential trade deals…There wasn’t too much hope we’ll have a trade deal done in time when this one expires,” Ettner said. “Now that the talk is we’re just going to extend the current one, that is optimistic. That is something we can get done in a couple months’ time.”

He added that out of all grains, corn would be the most affected by a new trade deal with China. Without a trade deal, China would only buy 10 per cent the amount of corn if there was one in effect, according to Ettner.

“If we lose the trade deal, we’ll still have a solid amount of Chinese buying that we’ve always had for (soybeans). But for corn, China just doesn’t buy that much and the trade deal sparked a lot of China buying corn they don’t usually buy,” he explained.

Rising oil prices and rallies in stock markets have resulted in a series of macrobuying, raising grain prices, according to Ettner. While corn was above technical levels, a bounce in soybean prices was not enough to get out of a “downward channel”. Wheat prices, especially in Minneapolis, have also rallied in sympathy with French milling wheat reaching new contract highs.

“I would have to say we’ll have to wait and see what news is truly moving (the markets) and how much we believe in (them) and how much we feel (the news) can impact the markets,” Ettner said.

The post CBOT weekly outlook: Potential U.S.-China trade deal moving markets appeared first on Canadian Cattlemen.

In many ways 2020 was a year that felt like it lasted a decade. A decade in which everything changed all at once, and then entered its own odd stasis.

The agricultural futures markets had their own share of twists and turns over the course of the year, but generally showed resilience and strength. ‘People still need to eat,’ was a popular mantra.

Looking at the canola futures in particular, prices hit their lows of 2020 in mid-March right when lockdown measures were first being implemented and the unprecedented nature of COVID-19 put markets around the world on edge. The futures then entered a four month period of directionless trade before something clicked in July. Aside from a few sporadic profit-taking corrections, the trend has pointed higher ever since with front-month canola contracts gaining about C$150 per tonne over the past five months.

Prices were hitting session highs above C$640 per tonne just ahead of Christmas, with C$650 the next likely technical target. Canola last traded at that level in 2013, and many analysts think the strength will last at least until the 2021/22 crop gets closer to reality.

Chart-based speculative buying has played a part in the canola uptrend, but the underlying strength comes from supportive fundamentals. Demand for canola is just so strong that it will need to be rationed in order to keep ending stocks from getting too tight.

Soybean and corn futures at the Chicago Board of Trade showed a similar pattern of stasis in the first months of the pandemic followed by a steady uptrend over the fall and into the winter.

Attention in those row crops at the start of the New Year is focused squarely on South American weather conditions. It’s the height of the growing season in Brazil and Argentina, with many crops seeded into dry fields. Moisture conditions have shown some improvement, but the risk of yield losses should keep a weather premium in the market ahead of the North American growing season.

The activity in wheat over 2020 was much more choppy, Chicago soft wheat closed out the year relatively strong, as the rising-tide influence of soybeans and corn contributed to strength from export restrictions being imposed in Russia. However, the spring wheat traded in Minneapolis lagged to the upside, as U.S. traders factored in a big Canadian crop and expectations for improved production out of Australia.

Looking ahead, 2021 is bound to be filled with its own ups and downs in the futures markets. A change from much of the pandemic-related upheaval that 2020 brought would be more than welcome, but more of the same strength that the markets saw over the past quarter wouldn’t hurt either.

The post 2020 grain market review: The year that felt like a decade appeared first on Canadian Cattlemen.

“Traders are trading headlines,” Reilly, an analyst for Futures International in Chicago, said in reference to the latest developments in U.S.-China trade talks.

Reports on Wednesday morning said the two countries were close to signing phase one, a partial trade deal that has languished unsigned since it was tentatively agreed to in October. Phase one was to have been signed last month at the since-cancelled Asia-Pacific Economic Co-operation summit in Chile.

Only on Tuesday, U.S. President Donald Trump stated a trade deal with China would very likely not be signed until after his country’s elections in November 2020.

As for wheat, the analyst said Minneapolis bids have remained fairly strong due to a possible durum shortage in Europe, as well as uncertainty surrounding the size of durum crops in Canada and North Dakota.

Statistics Canada issues its next crop production report on Friday and Futures International predicted Canadian durum to come in at 4.956 million tonnes. That would be down slightly from the federal agency’s September projection of 4.998 million.

Also, the U.S. Department of Agriculture (USDA) comes out with its next supply and demand report on Tuesday next week.

With USDA’s weekly export sales report to be released on Thursday, Reilly expects it to be uneventful. In particular, he said U.S. wheat will continue its struggle to find more international buyers.

Overall, Reilly expects CBOT to remain quiet, with prices “to wobble back and forth on headline news and geopolitical events.”

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

The post CBOT weekly outlook: Headlines, geopolitics drive prices appeared first on Canadian Cattlemen.

“On a week to week basis, we’re kind of at the low end of the range,” Derwin commented, noting C$450 per tonne has been near the low end of that range.

With the summer slowdown, there has not been much to push canola bids very far either way. Even trade talks between the United States and China haven’t generated a rally with the soy complex at the Chicago Board of Trade with its associated spillover into canola.

Compared to the last few summers, 2019 has been a little bit slower than usual, Derwin said.

However, that’s all relative as to where canola prices have been at summertime. He said prices in 2014 were around C$400 per tonne during that summer, which are lower than they are currently.

Derwin said farmers might be selling more of their canola, either as a means to generate cash flow or to clear out their bins to make room for the coming harvest.

Several traders and analysts have pointed to August 12 as being key to the markets. That’s when the U.S. Department of Agriculture releases its revised numbers on corn, soybean and prevent planting acres for 2019. The previous data was considered flawed as the USDA’s surveys occurred before farmers completed their planting.

Wet conditions played havoc across the U.S. Midwest and Plains, which very likely saw farmers switch from corn to planting soybeans. Increased soybean acres were largely expected in 2019, but the wetness may have curtailed the size of that increase. As well, prevent planting acres were also expected to be up this year.

The post ICE weekly outlook: Canola bids not moving much appeared first on Canadian Cattlemen.