With little new info, markets settle into January doldrums
Traditionally there is a lull that occurs for commodity markets in early January. Holidays have passed and until the U.S. Department of Agriculture reports on stocks, winter wheat acreage, and supply and demand estimates, there is little information for the market to find direction.
This year's U.S. government shutdown (now the longest in history) has left the Department of Agriculture is on the sidelines from a reporting perspective until funding is restored and the government is reopened. That means that no reports mentioned above were released and export sales data on agricultural goods also is not reported. So much of the data available is based on weather, some mention of sales, and demand that is known without the government's reporting. And there is some movement from day to day, but for the most part the lull that we usually see in early January is continuing with little major directional moves for commodities.
Wheat prices have been bouncing around the established trading range for quite some time. And while there has been some 8- to 10-cent moves in a day, those days quickly correct and leave prices mostly unchanged from week to week.
From an export perspective, the U.S. and Canada are competitively priced with other sources, but Russia continues to be a seller despite dwindling supplies.
Weather is mostly favorable for the U.S. winter wheat crop though we do not know quite how many acres were planted this year due to both the government shut down and wet conditions during planting.
Durum prices are holding steady and right at the old lows. Do not expect much movement until the spring when weather can again become a driving factor. The market is well supplied and prices should not be moving more than a few cents here or there until spring.
The canola market has not been able to rally off of old lows. The main drivers include huge soybean supplies and palm oil stocks globally and the ongoing trade war with China and the U.S. The trade war does give canola some added demand, but with the 90-day negotiation window in effect and no U.S. Department of Agriculture data on exports to give insight to how China's buys of U.S. soybeans are progressing, it is unclear what canola demand looks like in the months ahead. Crude oil has found its legs after hitting a low mark in late December, which is supportive, in theory. But markets have not been able to gain much ground in recent weeks.
Peas and lentils
Pulse prices have been firmer to start the year, but remain relatively quiet. There has not been much trade to get excited about, but export sales to Argentina has bolstered hopes of rising demand.
The mustard seed market started the 2019 calendar year on a firmer note. Demand has picked up for brown and yellow seed, leading prices higher.
Barley prices have been weaker in Canada over the last week. Most users are covered going forward, so there has been little trading action to get excited about. But the mild winter in most areas is leading to lower feed demand in both the U.S. and Canada, softening feed demand.