Periodic Updates on the Futures Markets

January canola is down $11.10 per metric ton (mt), Dec soybean oil is down .95 cents per pound, February European rapeseed is down 4.75 euros per mt and December Malaysian palm oil is down 1.24%. Dec oats are up 4 cents per bushel. December crude oil is up $.01 per barrel, December ULSD is down $.0181 per gallon, and the December Canadian dollar is down .00165 at .71515. The December U.S. Dollar Index is up .232 at 99.580 and the November Brazilian real is down .00015 at 0.18570.

The answer to Friday morning’s canola comment, “The unusual strength at a time when soybean oil has struggled does make you wonder if there was progress made at the APEC summit in ending the tariff war between Canada and China, or if it’s simply short-covering ahead of the meeting between Prime Minister Carney and Xi Jinping” seems to be fairly clear now. The sharply lower canola price currently suggests it was short-covering just in case tariffs were removed during the meeting. The readout does look like it was a very positive, productive and respectful meeting where both leaders directed their officials to resolve outstanding trade issues and irritants. Canola, seafood and EVs were specifically mentioned. So, even though nothing concrete came of the meeting (other than a commitment to resolve the issues), Carney’s accepting an invitation from Xi to travel to China is a glaring example of how much relations have improved since Xi scolded then Prime Minister Justin Trudeau publicly at the G20 meeting in 2022. Hopefully this was a positive step forward.

In other ag markets, a quiet day moving around unchanged is what has happened (as suggested earlier). Even wheat managed to recover from losses and turn positive. Only soybean oil (and canola) continues to see selling pressure going into the end of the month on what appears to be continued spreading against soybean meal.

Outside markets are quietly mixed with strength in the U.S. dollar the only notable exception. It is getting closer to testing the July high at 100 with a rally over suggesting the double bottom target of 104 should be kept in mind. Higher interest rates for longer (than previously expected) are the most likely driving force.