Grain markets were showing downward movement this week.
P.I. Financial commodity futures advisor Adam Pukalo says the July canola contract is down 20 dollars per metric ton, while spring wheat futures (July Minneapolis Wheat) have declined about 20 cents a bushel, at under $8.50 a bushel.
There are two factors, Pukalo says, for the canola contract trending down.
“The first is the U.S. Dollar has started to creep back up higher, and that’s one thing that we mentioned last week is how the U.S. Dollar is definitely been affecting a lot of the U.S. grains recently.
The second thing that kind of affected grains it seems this week is crude oil declining. Crude oil is now almost closed a gap on the chart which implies that we could be seeing it head a little bit lower still, and we saw a couple of weeks ago that OPEC cut production; oil prices jumped over 80 dollars a barrel, and now we’re sitting below that, sitting around 78 dollars.” explained Pukalo.
Regarding the factors for wheat futures also down, Pukalo noted rain in the forecast for Kansas, as well as ample global supply.
“On the Ukrainian side of the markets, grains continue to be transported across 5 countries…which has reduced the risk associated with another Black Sea deal in the future, so that’s kind of one thing as well that I’ve been talking to clients about,” Pukalo added.
Looking ahead, Pukalo sees the July canola contract hold at 720 dollars a metric ton, while the trend for spring wheat could be slightly lower at 8 dollars and 20 cents a bushel.