The market likes volatility. And many consecutive years of generally good weather for most crops in the U.S. has limited that volatility (in general terms).

A long-term price chart will show just how different the markets have been trading over the last few years. Nearby corn futures, for example have traded in a $1.40 range since the summer of 2014! Supplies of most crops have been comfortable which limits unpredictable, significant rallies.

But years of this type of market makes moves like this week seem extreme. News that China may be buying some U.S. commodities got all agriculture prices moving, with soybeans up 13 cents, wheat up eight, and soybean oil up 54 points. But do not forget that these moves are small compared to the daily moves that we all lived through in 2008-2009, and again in 2012.


Wheat prices were firmer this week, but remain in the established trading range.

The rumor that China is buying U.S. wheat got the market going, but a technical resistance point kept prices from running away to the upside.

The biggest questions facing the wheat market surround exports and planted area. First, export business had been limited with the U.S. and Canada due to uncompetitive pricing versus Russia. But now that Russia is low on exportable supplies, demand is shifting, leading to price support. We saw that this week as China allegedly bought some wheat from the U.S. and planted area is an unknown.

Due to poor weather in the fall, winter wheat area in the U.S. is likely lower, but the lack of data from the Department of Agriculture means that we are flying blind until the government is funded. Also, speculation about spring wheat area is already circulating, with the potential for some area to be taken from soybeans in 2019.


Durum prices remain very cheap while new market information remains light. There just is not any bullish news out there to lend support to the struggling market.


The canola market hit a new low this week before moving back higher with the soybean oil market. The monthly North American Oilseed Processors Association report showed record crush for soybeans in the U.S. during December. Demand has been very good, providing some bullish market support despite the lingering trade war with China. Rumors midweek of wheat trade with China and the U.S. lent support to all agriculture markets, spilling over to canola. Note that global oil supplies are still large, so a huge rally is not expected in the near term, however.

Peas and lentils

Pulse export demand has been good, keeping pea and lentil markets supported. Lentil exports were ahead of the previous crop year to date in the most recent Canadian Grains Commission data. And data from India's Directorate General of Commercial Intelligence and Statistics showed higher imports of peas in December (up 53 percent from November) with Canada the primary source.

Mustard seed

The mustard seed market in Canada has been firmer, this week. Supplies available from growers are lagging behind demand for both exporters and domestic processors. Despite this recent strength, prices are still below levels from the fall.


The International Grains Commission reported that global barley prices have fallen (by roughly 4 percent) in the last month. Despite tight global supplies and generally good export demand, prices have had a hard time maintaining any support. This is primarily due to China's move to launch an anti-dumping probe into Australian barley imports.