Periodic Updates on the Futures Markets

March canola is up $9.90 per metric ton (mt), March soybean oil is up .94 cents/pound, May European rapeseed is up 4.25 euro per mt and April Malaysian palm oil is down .14%. March oats are up 1/2 cents/bushel. March crude oil is up $.22 per barrel, March ULSD is down $.00134 per gallon, and the March Canadian dollar is down .00150 at .73230. The March U.S. Dollar Index is up .259 at 97.560 and the February Brazilian real is down .00045 at 0.18930.

Volatility returned in a big way to the oilseed complex in early trade as President Trump surprised the market with a social media post reporting on a very positive phone call he had just concluded with China’s Xi Jinping. Among other topics, he claimed they discussed China increasing old-crop soybean purchases to 20 million metric tons (mmt) from the 12 mmt already spoken for. The 25 mmt target for 2026-27 would remain in addition to 2025-26 purchases.

That caught traders off guard and apparently triggered headline algorithms as soybeans shot up almost $.50/bushel at one point. The market has given back roughly half of that so far, but the entire oilseed complex remains sharply higher on the news. Canola managed to trade over $10/mt higher at one point, clearly taking out last week’s high and confirming a sharp rally off the 100-day moving average and support at $640/mt. The November high of $670.70/mt appears to be in traders’ sights now.

Corn and wheat initially joined the rally, but those gains were short-lived. That said, with rumors of high toxin levels in China’s corn crop due to the wet fall causing feed supply concerns, corn may end up on China’s shopping list yet. 

Outside markets have been satisfied with observer status as stocks, bonds, metals, and energies are all mixed. The U.S. dollar has strengthened while cattle markets hold their gains.

The energy inventory report confirmed last week’s extreme cold did seriously impact production with ethanol down 14.2% on the week. With the weather impacts, crude oil inventories ended up falling 3.5 million barrels when they were expected to be unchanged while distillate (heating oil/diesel) stocks fell 5.6 million barrels versus estimates of a 2.4-million-barrel drawdown.