Periodic Updates on the Futures Markets

January canola is up $4.90 per metric ton (mt), Dec soybean oil is down .33 cents per pound, February European rapeseed is up 1.50 euros per mt and December Malaysian palm oil is down .65%. Dec oats are up 1 cent per bushel. December crude oil is down $1.43 per barrel, December ULSD is down $.0587 per gallon, and the December Canadian dollar is up .00270 at .71910. The December U.S. Dollar Index is down .083 at 98.480 and the November Brazilian real is up .00030 at 0.18630.

In an impressive show of strength, grain and oilseed markets have extended gains as the morning has progressed. Soybean oil is the lone exception thanks to continued unwinding of oil/meal spreads and the weakness in energy markets intensifying. December soybean meal is up a very unusual $8.90/ton again after gaining $26.10/ton since the short-covering rally started on Oct. 15. That amounts to a 12.5% gain in less than two weeks. Back to the leader, soybeans, another $.22/bushel gain at midday takes the January contract over $11/bushel for the first time since the start of October last year. At some point here, the buying will likely subside until the details of the meeting between President Trump and Xi Jinping are revealed. In the meantime, canola has finally distanced itself from soybean oil and rallied along with soybeans.

Corn has also rallied sharply through the morning with the gap lower on July 7 now completely closed. A close at these levels would suggest an eventual rally to $4.68/bushel if the target of the inverted head and shoulders bottom is to be attained. The exceptional demand amid declining yield expectations is the fundamental driver with funds surely exiting short positions as part of the buying strength. We’ll find out once the shutdown is over.

Cattle markets are mixed with feeder cattle futures sharply lower again, trying to establish a support level, while live cattle contracts are slightly higher on the day. One would assume the market reaction would make the administration nervous about re-opening the Mexican border, especially after it just recently claimed closing it until new world screwworm detections decline was a matter of national security.

Outside markets are little changed from overnight moves with Treasuries and equities quietly higher, and the U.S. dollar quietly lower. Energy markets are seeing losses increase amid talk that another slight increase in OPEC+ production quotas expected to come from the coming weekend’s meeting.