Soybeans were the star performer again over the past week. Exports have averaged 47 million bushels per week over the past 4 weeks, which is double last year in Nov., and the highest total for that month in 25 years. China was the big buyer.

 

Perhaps the buying was a conciliatory goodwill gesture by China, but it could also be due to the fact supplies in Brazil have been depleted over the past 9 months, when China shunned US supplies. Regardless, demand has been strong lately.

 

Meanwhile, China keeps shunning Canada. Our total exports to them fell 19.3%  in Oct., to the lowest level in 5 years. In 2018, more than one-third of our exports went to China; now it’s less than 11%. Our soybean and canola exports were a huge contributor to the decline.

 

There are pockets in South America that are dry, and the forecasts are hinting that could intensify over the next two weeks. The fundamental focus has shifted to that part of the world. A serious drought there would propel soybean (and other grains) to higher levels.

 

Today USDA updated US and world numbers in their monthly WASDE report. As usual in the Dec report, there were very few changes. Markets reacted accordingly and yawned at the “news”.

 

The corn market has been a disappointment, especially considering soybeans are up $.35 so far in Dec. There are still a billion bushels in the US not harvested, and the weather is not co-operating. South Africa and Mexico are both experiencing droughts, which should help.

 

Stats Canada put the Ontario corn yield at 158.4, down 4.6% from last year. The soybean yield is pegged at 44.1 bu/ac, down 7.3 bu from last year. Despite higher acres for both, production will be down because of the yields.

 

The Canadian dollar is very resilient, despite terrible fundamentals. We lost 71,000 jobs in Nov., the largest drop since the economic meltdown in 2009. Meanwhile, job creation in the US was phenomenal. Normally this news would drop our dollar.

 

Our relationship with our largest trading partner surely didn’t improve after the conversation Trudeau had with some world leaders at the NATO conference, that went viral on social media. It appears the new USMCA trade agreement will still be signed today.

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