Plains, Prairies Quick Takes

Plains, Prairies Quick Takes

November canola is down $9.80 per metric ton (mt), December soybean oil is down .54 cents per pound, November European rapeseed is down 4.75 euros per mt and October Malaysian palm oil is down .41%. December oats are down 4 cents per bushel. October crude oil is down $.91 per barrel, October ULSD is up $.0108 per gallon and the September Canadian dollar is down .00020 at .72560. The September U.S. Dollar Index is down .362 at 97.985 and the September Brazilian real is up .00075 at 0.18230.

Grain and oilseed markets continue to ignore declining crop conditions, focusing instead on concerns over the lack of sales to China as recent meetings between China, Russia and India appeared to be very anti-American. Given the number of Chinese soybean processors that traditionally import soybeans on their own, outside of government import channels, it appears to be a coordinated boycott of U.S. beans. In the long run, the result may simply be a realignment of global trade patterns with increased U.S. domestic crush, also leaving less to export — but traders tend to want concrete results and answers sooner rather than later. Friday morning’s holiday delayed export sales report may shed more light on recent strong demand from alternative destinations. In the meantime, a few showers crossing the eastern corn belt over the next 24 hours will take the focus away from the dryness in the area. Weakness in the crude oil market, thanks to rumors of potential increased OPEC+ production quotas for October, is of little help as well.

In outside markets, a disappointing (weak) Job Openings and Labor Turnover Survey (JOLTS) report this morning has treasuries sharply higher, with lower interest rates the result. A weak labor market is the one thing that Jerome Powell has consistently said would result in the Fed lowering interest rates. This is yet another sign of such labor weakening.

So far, the lower interest rates haven’t helped equity markets, with the indexes mixed but off early (higher) levels. The U.S. dollar has drifted lower on the news, with it looking vulnerable to yet another retreat from the 100-day moving average — clearly a bearish technical sign.