Canola Going Back to $1000t?
On July 22nd, November canola futures reached an intraday low of $779t.
Today November canola closed at $892.8t
I've been getting the question, is $1000t canola going to happen again?
A supporting factor has been the almost $2/bu rally in soybeans over the last six days.
The weather outlook for soybeans is very threatening and traders are adding in a weather premium.
A hot and dry forecast for the first 10 days of August would cause for soybeans a lower yield.
If using a five year yield average, we could see record low ending stock numbers for soybeans.
Recent buying has pushed soybeans up to the highest level since June 22nd.
Strength in energy markets caused from a rally in the stock market are positive forces for all grains in general.
I believe canola is trying to find a new trading range.
I’m watching $800t as important support I want to see canola hold.
Short term, a rally above $860 could lead to $900.
Above $900 and $1000t is possible, but there would have to be some important fundamental changes for that to happen.
What is your plan if we see canola keep increasing OR go back lower?
Canola November Futures - 1 Year
Soybean September Futures - 1 Year
Wheat
Early this month wheat markets continued to decline, but have since been trading sideways for the last few weeks.
Spring wheat crop conditions came in well below expectations and there is not much rain in the forecast for the next 2 weeks with heat returning to the northern plains.
The 6-10 day and 8-14 day forecast models showed above normal temperatures.
While oversold, there is still no technical sign of a short-term low.
However, significant divergence in technical indicators suggests that there is a loss in downside momentum.
News that it may be a while before grain begins to move out of Ukraine helped to support wheat markets.
As well, weakness in the U.S. dollar, strength in the energy markets and other grains helped support.
Russia said this week that the missile strike on Odessa in Ukraine wouldn’t affect plans to resume grain exports from the Black Sea port.
If/when exports resumes, traders will be watching for signs of how quickly volumes can pick up.
I don't see any signs of a bull market resuming in the wheat market right now.
It seems that there could be more negative technicals that push the market lower coming into harvest.
Minneapolis Wheat September Futures - 1 Year
Chicago Wheat September Futures - 1 Year
Kansas City Wheat September Futures - 1 Year
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Corn
There is poor weather in Europe and the U.S. to help support corn prices.
Corn is up already 69 cents/bu approx from last Friday's lows.
Similar to soybeans, the hot a dry forecast for the first 11 days of August has traders nervous that corn yields could be negatively impacted by poor weather for filling the crop out.
Heat and dryness is expected to continue for the southern half of Europe next week as heat looks like it will build back up going into next week.
There is almost no rain in the forecast for the Western Corn Belt and for northern and western Illinois.
One negative factor could be that if we see a decline further in wheat it will keep corn from rallying further.
I have support for Dec corn at $5.80 and resistance at $6.60.
Corn September Futures - 1 Year
Cattle
The cattle market continues to see a clash of....
1. Bullish supply expectations for the fourth quarter and for the first half of next year and
2. Bearish influence of the continued liquidation of cows and heavy placements of heifers.
These are bearish short-term supply factors, but quite bullish for 2023.
Concerns over a budge in short-term production has helped to trigger the selling recently.
Longer term trends remain positive for feeder cattle with live cattle trading more sideways.
Feeder Cattle October Futures - 1 Year
Live Cattle October Futures - 1 Year
