Finally, the sun has some oomph, while the same thing cannot be said about the markets. Since January these markets have done nothing but aimlessly drift lower. However, this aimless drifting should soon be replaced with exciting rumors of 2023 crop failure. March is always the time when the market wakes up and shifts the focus to summer production. From now on expect more volatility.
Volatility plays an important role in grain marketing. Use it to grab high priced targets for huge profits.
Why This Matters
Last year was an extremely volatile year, one should expect volatility to remain which gives great opportunity. The best way to capture these volatile markets is the use of targets as the market can move 25 cents in one day. Most of the time a flat price target will work just fine. However, for those who are a little more daring, a futures only target may be an excellent choice.
Bulls and Bears
Canola Bulls: Smaller than expected Canadian canola crop. Bears: Larger than expected Brazilian soybean crop.
Bulls: Farmers are reluctant sellers which is keeping the price higher than expected.
Bears: Feedlots are using corn, rumored that 30% of feedlots are corn. Canadian export program is poor as Australia is cheaper.
Barley is in a downtrend. However, don’t despair too much as the current price is still higher than it was in October 2022.
It does not seem like barley is headed back down to its previous lows of sub $6.00 bu, but the days of 8.50 are probably gone for now.
Below: It is all about the ratio. Globally the world can consume all the extra year-on-year vegetable oil production. This is very important because any production hiccups could cause the market to rally, which directly impacts canola price.
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