Markets posted solid gains in the past two sessions across all commodities with support coming from a number of fronts. Outside markets were higher with crude gaining over $2/barrel yesterday and stock markets up by over 200 points, which boosted investor confidence as money flowed into both the ag sector and equities. Weakness in the US dollar along with declining crop conditions all contributed to sharp gains on the day.
Corn’s run higher is related to declining crop conditions especially in Iowa, as private forecasters are calling for lower yields. There has been talk that China was back in the market as well.
Oats has been a weak sister lately, but still managed to gain 6 ¾ cents yesterday. Lower ocean freight rates are making Scandinavian imports more attractive, limiting the upside.
Wheat had another strong day with all three pits up anywhere from 23 to 25 cents, and another 12-18 cents/bu today. More talk of yield reductions in Europe and FSU along with increased outside money flow and strong chart buying signals contributed to the rally.
Beans found similar support as the cereals. Weather forecasts are calling for above-normal temps next week, which is the main cause of values moving higher, especially in the new crop. Soyoil garnered slightly less than a penny gain yesterday, as it followed higher petroleum prices. In addition there were rumors that China was back looking for more cargoes.
Canola posted fresh contract highs in the Nov with gains of over $10/mt, and held those gains today. Ongoing concerns about our crop, fears that the European crop has been reduced with the recent heat, and strength in Chicago futures, all contributed to the rally.