Well most of the day yesterday was a downer if I would say so myself. Almost all of the commodities recovered from some major losses early in the day and decided to close slightly down. An example is that Spring wheat started off anywhere from 25 to 30 cents lower yesterday morning to ending the day only 4 cents lower! The crazy thing in the spring wheat market is that since last Thursday or the last 3 trading sessions, the market has dropped over $1.00 dollar in price (Yikes). Overall, the main factors that are driving the wheat price down is the slightly improving wheat conditions and that there is still plenty of world wheat out there and will continue to weigh on prices! It also doesn’t help that World Wheat is going to be increasing in size compared to what the USDA was expecting which was for it to decrease. Soybeans and corn are under pressure from beneficial weather moving in, which should help each crop in their important growth stages. Soybeans are also under pressure from the fact that we might have another large crop. Corn futures are lower from pressure of improving crop conditions and the help from cooler weather. Currently Crude Oil is trading lower while the US dollar is trading higher this morning.
Durum is following the wheat market as it continues to fall. Recent rains could be helping yields. Overall, the Canadian dollar is weaker than the US dollar causing the Canadian crop to be more competitive in the export markets.
Canola is somewhat along the same lines as durum, where the Canadian dollar is weaker causing their crop to also be more competitive to export buyers. The market is currently following the soybean oil and bean market which is trading lower. Yields have the potential to be lower from the dry weather and high heat, which could cause canola production to be lower.
Flax production could be lower for 2017/2018 due to the drought conditions we experienced. Year ending stocks remain at good levels even after the drought and the chance of lower production. Once again, the lower Canadian dollar and a chance for a higher carryout in Canada seems be taking a toll on US flax prices and demand creating pressure in the market.
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