With traders in the United States moving to the sidelines for the U.S. Thanksgiving holiday, activity should be thin and choppy until next Monday.

Speculators moving money around accounted for much of the activity, with movement in the Chicago soybean market in reaction to Brazilian weather forecasts another feature.

“It’s purely technical and we’re waiting to see how the (South American) weather develops,” said commodity futures specialist Jamie Wilton, of RJ O’Brien in Winnipeg.

While canola fell on Wednesday, the nearby trend is still pointing higher, according to MarketsFarm analyst Mike Jubinville.

With speculative fund traders holding a large net short position in canola, he expected the January contract would need to close above $735 per tonne to trigger a more sustained move higher, with $750 the next upside target.

The 200-day moving average around $741 per tonne was another chart point to watch, according to Wilton, with the nine-day exponential moving average around $709 a key support level.

“Monday will be key,” according to Jubinville, who expected U.S. traders returning from the Thanksgiving holiday would look at the South American situation and set the direction of the oilseed markets going into December.

“It will just be modest shifting of fund positions until we see a real signal from a chart perspective, and we have not seen that signal yet,” he said.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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Meanwhile, wheat futures fell sharply — with the December contract hitting its lowest since Aug. 22 — as recent weakness in Russian wheat prices continued to weigh on the market, traders said.

Soybeans ended the day nearly unchanged after Argentina announced it would reestablish a preferential currency exchange for soybean exports until the end of the year, in a bid to rev up exports of its top cash crop and bring in much-needed dollars.

And questions of export demand for U.S. grain and oilseeds also weighed on the market, traders said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) settled the day down 16-1/2 cents at $7.97 a bushel (all figures US$).

CBOT most-active soybeans gained 1/4-cent to $14.36-1/4 a bushel, and corn settled up five cents at $6.71-1/4 a bushel.

Chicago-traded grain and oilseed markets closed at 12:05 p.m. Central time on Friday. CBOT grain markets were closed overnight and on Thursday for the U.S. Thanksgiving holiday.

Corn futures strengthened, as the market continued to track not only dry weather forecasts that may cause more stress on Argentinian crops, but also questions of whether Ukraine’s harvest might face challenges next year, traders said.

“Roughly half the corn remains in the field as winter sets in,” Arlan Suderman, chief commodities economist for brokerage StoneX wrote in a commentary note. “Authorities fear that corn not harvested will result in lower plantings in 2023 as well.”

— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.

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The Canadian Food Inspection Agency (CFIA) is warning the public that raw poultry, including turkey, from restricted areas of the U.S. will not be allowed past the international border due to the ongoing fight with highly pathogenic avian influenza (HPAI).

CFIA tightened rules around poultry shipments earlier this year, in the face of North America’s woes with the disease.

Both states on Manitoba’s southern border make that restricted list. North Dakota and Minnesota both have active outbreaks of HPAI, along with other border states such as Idaho, Washington, Michigan, New York, Maine and Pennsylvania.

No raw poultry or raw poultry products can be imported into Canada from those states or others on the restricted list, although rules were relaxed as of Sept. 19 to allow cooked, ready-to-eat poultry, regardless of its state of origin.

“Raw poultry will only be allowed entry into Canada with documentation, such as a receipt, stating it was purchased in a state not currently affected by HPAI outbreaks,” CFIA has said. “Those without proper documentation will have to surrender their poultry to Canada Border Services officers for disposal, or return the item to the grocery store.”

(Carcasses of hunted wild game birds originating from the U.S. are still allowed into Canada with a hunting permit, CFIA said.)

Fall case rise

As of Wednesday, the count of U.S. farm birds impacted by HPAI had officially ticked over 47 million, according to the U.S. Department of Agriculture. All but eight states have seen HPAI since the start of outbreaks in late 2021.

Canadian cases, meanwhile, had spread to 157 premises and impacted over 2.9 million birds north of the border as of Wednesday, according to the CFIA.

Both the U.S. and Canada have seen case surges in the last month and a half as wild birds — the most common infection vector — begin their fall migration.

In Manitoba, for example, that has translated to the first commercial barn infections since April. Eleven infections have been reported since Sept. 14, all but one in a commercial barn.

Nine control zones have been set up around the infected commercial properties (see map below). Of those, two sit in central Manitoba, while clumps of control zones have descended around Ste. Anne in the east and the northwestern shore of Lake Winnipeg. Eight of the recent 11 cases have occurred either in the RM of Ste. Anne or RM of Bifrost-Riverton.

Before September, only three cases had been confirmed provincewide, two of which were in small flocks.

Among other provinces, from the beginning of September up until Thursday, Alberta has had 13 confirmed HPAI outbreaks in commercial poultry barns, followed by Saskatchewan with six, Ontario two and British Columbia one.

The sudden rise comes as many Canadians are looking to put a turkey on their table.

Helga Wheddon, general manager of the Manitoba Turkey Producers, confirmed that there are turkey barns impacted by the prescribed control zones.

Her group is working with CFIA and the provincial veterinary authority on the issue, she said.

“We’ve got teams involved on it,” she said. “We’re doing our best to work with them and the producers to use high biosecurity measures and proper protocols to try and get the situation under control.”

CFIA has implemented a sliding-scale permit system for poultry operations in those zones that want to move product. “Lower-risk movements” such as unwashed eggs coming into a control zone, only require a general permit. Live birds leaving the zone, however, would need a specific permit. Producers at that level may have to clear requirements like pre-shipment testing, increased monitoring and traceability or more rigorous flock health monitoring, the agency has said.

That permit system has “gone well” in the face of the high-traffic season, Wheddon added.

“The supplies for turkey here in Canada will be adequate to ensure that there will be turkey for all who want to have turkey at their Thanksgiving meal,” she said.

— Alexis Stockford reports for the Manitoba Co-operator from Brandon.

Red areas denote active control zones for highly pathogenic avian influenza in Manitoba. (CFIA map)

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“There’s good weather in South America, maybe too much rain in Australia. We have to remember rain makes grain,” Bryan Strommen of Progressive Ag at Fargo, N.D. said.

Reports out of Brazil and Argentina have pointed not only to sizeable corn production come 2022, but also to record soybean production in Brazil and a hefty crop for its southern neighbour.

Meanwhile, wet conditions in parts of Australia have eroded the quality of its wheat harvest.

Strommen said the wheat complex has been on the rise recently, due in part to sharp upticks in Paris wheat futures that have hit new contract highs. However, at mid-morning on Wednesday, Chicago, Kansas City and Minneapolis wheats turned sharply lower, which Strommen chalked-up to profit-taking.

With the lead-up to Thanksgiving, he said, there will be thin volumes of trading — and he noted December options expire at the close on Friday.

Strommen explained he doesn’t expect any substantial movement either way at the CBOT until after New Year’s.

“We’ll have some bigger reports here in January. I don’t think the bottom falls out a bit, but I don’t see a reason for the markets to run extremely higher into the end of the year,” the analyst said.

Come January, the U.S. Department of Agriculture is scheduled to release its monthly supply and demand estimates on the 12th. As well, USDA will issue its initial crop projections for 2022 that month.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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A firmer U.S. dollar added pressure, but losses in corn and soy were tempered by signs of improved export demand.

Markets will be closed on Thursday for the holiday and Friday’s trading session will be abbreviated, prompting funds and other traders to square positions on Wednesday.

“We’re seeing some pretty heavy liquidation pressure pre-Thanksgiving,” said Mike Zuzolo, president of Global Commodity Analytics. “But we saw the export sales in the corn and soybeans. That underpinned the demand sentiment that was starting to get more negative as the dollar made new highs.”

Chicago Board of Trade March wheat fell 17-1/4 cents to $8.50-1/4 a bushel after hitting a contract high of $8.74-3/4 earlier in the session (all figures US$). It was the highest point for a most-active contract since December 2012.

Wheat markets have been propelled higher this week by concerns about global supplies and expectations of rising demand. Paris-based Euronext futures set historic highs on Wednesday as the euro hit a 16-month low against the dollar.

Rains stalled Australia’s bumper harvest this week, leading to worries of lower quality supplies.

Meanwhile, prices in top exporter Russia have jumped, shipments from Western Canada have been disrupted by flooding and U.S. winter crop conditions have worsened.

CBOT March corn fell 2-3/4 cents to $5.85-1/2 a bushel, retreating from a nearly-five-month high of $5.96-3/4 for a most-active contract notched earlier in the session.

January soybeans fell 6-1/2 cents to $12.66-1/2 a bushel.

In a daily sales announcement on Wednesday, the U.S. Department of Agriculture (USDA) reported 100,000 tonnes of U.S. corn sales to Mexico and 330,000 tonnes of soybean sales to undisclosed buyers.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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But as surging COVID-19 cases prompted U.S. cities and states to urge Americans to stay home just weeks before the holiday, customers swapped out orders for whole birds for smaller turkey breasts.

As a last-minute shift toward small-scale celebrations upends demand for the star of Thanksgiving tables, turkey producers and retailers were scrambling to fill orders for lightweight birds and partial cuts.

“It was very stressful,” Gunthorp said. “It cut our numbers on being able to fill customer sizes that they wanted for turkeys — way too short.”

Gunthorp raised and sold nearly 7,000 pasture-raised turkeys this year, up 75 per cent from a year ago. Restaurants and meat shops in major Midwestern cities, his primary clients, cut orders by 10 per cent to 20 per cent, but Gunthorp has made up the difference by partnering with online retailers, shipping turkeys as far away as Los Angeles.

Suppliers needed to be nimble as about half of Americans planned to alter or skip traditional festivities due to local health advisories against big gatherings, according to market research firm Nielson. About 70 per cent were planning a Thanksgiving with fewer than six people, compared with 48 per cent last year.

Demand for smaller birds will trim turkey production to 1.445 billion pounds in the last quarter, down five million pounds from previous expectations, according to a Nov. 17 report from the U.S. Department of Agriculture.

“We have seen our supply chain adjust to market disruptions and shifting consumer needs,” said Beth Breeding, spokeswoman for the industry group National Turkey Federation. “Like the rest of the country, it has been a challenging year for turkey production.”

While best known for beef, Nebraska-based Omaha Steaks this year offered three-pound turkey breasts for the first time to cater to smaller Thanksgiving gatherings, said Nate Rempe, president and chief operating officer. The precooked product sold out online, as some consumers are avoiding grocery stores.

Omaha Steaks also sold out of 10-pound turkeys earlier than usual, Rempe said.

“The number of individual Thanksgiving meals being prepared… is going to be much higher because of the separation of gatherings,” he said just before the holiday.

Butterball, the largest U.S. producer of turkey products, shipped 1,900 truckloads of whole turkeys to grocers in the past two weeks, said Al Jansen, executive vice-president of marketing and sales. Many major chains booked orders in the first quarter before the coronavirus outbreak, he added.

Retailers slashed whole-turkey prices by about seven per cent to an average of US$1.21 per pound, the lowest since 2010, according to the American Farm Bureau Federation. That cuts the average cost of a Thanksgiving meal for 10 people by four per cent to US$46.90, Farm Bureau said.

The decline was welcome news for the nearly 24 million households facing empty cupboards due to COVID-19-related job losses. Food insecurity has nearly tripled since the pandemic began, according to U.S. Census Bureau data.

“Thanksgiving will not be a holiday that all Americans can enjoy this year,” said Joseph Llobrera, research director at the Center on Budget and Policy Priorities. “Alarming levels of food hardship will last through the holidays and beyond unless policy-makers immediately provide robust COVID relief.”

Some Americans who had relied on others to cook on Thanksgiving were ordering part or all of their meals from restaurants for the first time. Others simply do not want the hassle of preparing a feast for just a few guests.

“Thanksgiving is going to look very different this year, and we know there’s a lot of cooking fatigue out there right now,” said Tracy Hostetler, a vice-president for Perdue Farms, just ahead of the holiday. The company launched turkey “ThanksNuggets” as an alternative to traditional turkey dinners.

In Houston, independent marketing consultant Anh Nguyen, 50, was planning to dine with about 10 relatives on a smoked turkey from a local restaurant. Normally, three times as many of her family members gather to gobble up two 20-pound turkeys cooked at home.

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Chicago Board of Trade March wheat futures settled down 21 cents at $5.96-1/2 a bushel, turning lower after rising to a three-week high of $6.22-3/4 in early moves (all figures US$).

Last month, the most-active CBOT wheat contract neared a six-year top at $6.38-1/4 as dry conditions in parts of Russia and the United States raised supply concerns.

But spring weather is typically more important in determining crop size, and in the absence of fresh supportive news, traders on Wednesday opted to book profits.

“Most of the wheat stuff is known. So there is not a lot of new news,” said Don Roose, president of Iowa-based U.S. Commodities.

Also bearish, the Sovecon agriculture consultancy raised its forecast for Russia’s 2020-21 wheat exports by 1.0 million tonnes, to 40.8 million tonnes, due to a higher crop estimate and a high pace of exports.

CBOT soybeans and corn closed lower. Benchmark soybean futures ended down 7-1/4 cents at $11.84 a bushel, retreating farther from Monday’s four-year high of $12 a bushel, and corn settled down five cents at $4.27-1/2 a bushel.

Traders have been liquidating long positions in CBOT December corn, wheat, soymeal and soyoil futures ahead of first notice day for deliveries on Monday (Nov. 30).

Soybeans were pressured by signs that Chinese buyers may be balking at lofty U.S. prices. Some Chinese soybean importers and processors are looking to cancel U.S. cargoes for December and January shipment, after crushing margins collapsed following the CBOT rally, three trade sources said.

“The bottom line is more demand uncertainty going forward,” Roose said.

However, soybean and corn futures had underlying support from worries about dry conditions in parts of Brazil and Argentina, where crops are still developing.

The CBOT will be closed on Thursday before reopening for a shortened session on Friday.

The U.S. Department of Agriculture is scheduled to release its weekly export sales report on Friday, a day later than normal, due to the holiday.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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Chicago Board of Trade March wheat futures settled up 13 cents at $6.17-1/2 per bushel after reaching $6.18-1/2, the contract’s highest level since Nov. 11 (all figures US$).

CBOT March corn ended down 3/4 cent at $4.32-1/2 a bushel. January soybeans settled down 1/4 cent at $11.91-1/4 a bushel, one day after climbing to $12, the highest price for a most-active soybean contract since June 2016.

Wheat turned up after early declines, supported in part by a weaker dollar, which tends to make U.S. grains more competitive on the world market.

“The dollar is down, and of course the conditions ratings being down were a little bit of a surprise,” said Terry Linn, analyst with Linn and Associates in Chicago.

The U.S. Department of Agriculture late on Monday rated 43 per cent of the U.S. winter wheat crop in good to excellent condition, down from 46 per cent a week earlier and bucking analyst expectations for a one-point improvement.

The biggest declines occurred in drought-hit states in the southern Plains.

Wheat drew additional support from traders exiting long corn/short wheat spread positions ahead of the holiday weekend. The CBOT will be open for a shortened session on Friday after Thursday’s holiday, but trade tends to be thin that day.

“Beans and corn are at or near new highs for their move, so it’s not unexpected to see the market get some liquidation around this time,” Linn said.

Traders were also squaring positions ahead of the first notice day for deliveries against CBOT December futures contracts, scheduled for Monday (Nov. 30).

“It’s just fairly light in terms of news, and traders are starting to enter the holiday trade,” said Terry Reilly, analyst with Futures International in Chicago.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.

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Hog futures on the Chicago Mercantile Exchange continued to rise on expectations that the spreading African swine fever virus in top hog producer China will force buyers to boost imports.

China officials on Friday said they were working to keep hog and pork supplies stable as farmers culled herds due to the highly virulent disease.

Even with China tariffs on imports of U.S. pork, increased shipments of the meat from Europe or South America could have ripple effects that would prompt demand for U.S. supplies.

U.S. Department of Agriculture data on Wednesday showed smaller year-on-year domestic pork supplies in cold storage, partially driven by increased exports.

“You have the underlying support from the African swine fever that just keeps getting worse,” said U.S. independent futures trader Dan Norcini.

“Cold storage was friendly to the market, if not outright bullish. We have record (hog) slaughter numbers but the demand for pork is pulling supplies down,” he added.

CME February lean hog futures settled up 1.65 cents at 67.825 cents/lb. (all figures US$).

The contract surged to a lifetime high on Tuesday before easing on Wednesday and then clawing back a portion of those declines on Friday.

CME February live cattle futures were up 0.175 cent to 120.925 cents/lb., a three-week high. January feeder cattle were up 0.75 cent to 149.375 cents.

Beef packers after the close of trading on Wednesday began bidding more aggressively to buy cattle in cash markets, ultimately paying about $116-$117/cwt, in sales that were higher than the previous week’s deals of mostly $113.

Wholesale beef prices have been relatively strong, bolstering profit margins for meat packers.

“Beef has been hanging in there. Maybe we have some demand kicking in. People will be sick of turkey, obviously,” Norcini said.

Trading volume was thin in an abbreviated session following Thursday’s U.S. Thanksgiving Day holiday when many Americans dine on turkey.

Stock indexes and crude oil were lower. Such “outside markets” often weigh on cattle as consumers often spend less on pricier dining options when financial markets falter.

“The good cash trade opened us up a little bit,” Top Third Ag Marketing analyst Craig VanDyke said of cattle. “That’s nice to see with outside markets being as heavy as they are.”

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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“These markets are going to just be very choppy and of course we’re going into December and nobody likes to work (during the holiday season). There’s more parties, Washington goes on Christmas break, nothing gets done,” said Scott Capinegro of Barrington Commodity Brokers in Chicago.

This trading week is shortened this week due to U.S. Thanksgiving on Thursday. U.S. markets will be closed Thursday, then close early on Friday.

“So no grain markets are open tonight (Nov. 22) and we open again Friday morning at 8:30 CST and we close at 12:05, so I mean nobody’s doing anything that day either,” Capinegro said.

On the U.S./China trade war front, traders await the meeting next week between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit in Buenos Aires. Capinegro doesn’t expect much to come out of the meeting, though.

“Do I expect a deal? The earliest would be in January. I can’t see anything coming out of China that quickly. Look how long it took us to negotiate with Canada and Mexico,” he said.

China holds the bargaining power, according to Capinegro. U.S. farmers are harvesting their corn and soy crops and are being forced to store them while demand in China for soy meal is faltering. The African swine fever outbreak is raging on in China leading to less demand for protein to feed hogs.

On top of that, Brazil has planted some of its soy acres early and will have some soybeans ready for export in January.

“So China’s pretty much all of the sudden starting to get in the driver’s seat,” Capinegro said.

Capinegro does believe a deal will be reached between China and the U.S. eventually, but he suspects it will be on China’s terms.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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