Periodic Updates on the Futures Markets

January canola is up $5.90 per metric ton (mt), Dec soybean oil is down .05 cents per pound, February European rapeseed is up 3.25 euros per mt and December Malaysian palm oil is up .80%. Dec oats are up 1/4 cent per bushel. December crude oil is up $.73 per barrel, December ULSD is up $.0276 per gallon, and the December Canadian dollar is up .00245 at .72145. The December U.S. Dollar Index is down .012 at 98.465 and the November Brazilian real is up .00045 at 0.18700.

It’s been a busy morning in what should be a busy day given the Trump/Xi meeting should occur in prime-time Wednesday evening CDT (already Thursday morning in South Korea).

Canola is breaking out over $640/mt resistance, confirming the breakout of the down channel that dominated the market from the June top until the divergence bottom in September. No news has been released but Chinese media outlets suggested Prime Minister Carney was considering rolling back EV tariffs in an attempt to get canola flowing. It may not be in the media in Canada yet given the politically sensitive nature, especially following Doug Ford’s public outburst over the idea. The market certainly is suggesting there might be something to it.

The balance of the grain and oilseed markets are quiet ahead of the meeting following a 180,000-mt sale of soybeans to China, which was confirmed by U.S. Ag Secretary Rollins.

In other volatile markets, feeder cattle traded limit up ($13.750/cwt) going into midday when the Mexican agriculture secretary confirmed that there was no date set on reopening the border. The fact that potential Argentine beef imports would amount to nothing more than a rounding error in U.S. beef consumption and most importantly, that boxed beef prices have actually increased 3.7% (for choice) from Oct. 16-28 while feeder cattle futures lost up to 16% of their value all suggest a V-bottom that cattle markets are notorious for may be in the cards. 

Outside markets are little changed from overnight moves going into the FOMC interest rate decision and the Trump/Xi meeting. Treasuries are quietly lower, equities quietly higher, and the U.S. dollar is maintaining gains, albeit lower than overnight. Energy markets are holding on to their gains from overnight amid sharp drawdowns in U.S. inventories of crude oil (-6.858 million barrels), distillate stocks (-3.362 million barrels) and gasoline stocks (-5.941 million barrels) according to this morning’s EIA weekly report.

The Canadian dollar added to Tuesday’s gains when the Bank of Canada’s Tiff Macklem announced a quarter-point cut off their policy rate (taking it to 2.25%) but followed up by suggesting that would likely be it for changes unless the economy took a turn for the worst.