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New forecast points to slow spring next year

CHICAGO, Ill. — Forecasters thought La Nina would be the major weather factor in 2017, but its looking more like La Nada, says Bryce Anderson, DTN’s senior agricultural meteorologist.

The Australian Bureau of Meteorology says the likelihood of a La Nina developing is now low. That viewpoint is shared by the U.S. National Weather Service’s Climate Prediction Center, which is forecasting neutral conditions from January through March.

That opens the door for what Anderson calls the B-team of weather influencers: the Pacific Decadal Oscillation (PDO) and Atlantic Multidecadal Oscillation (AMO).

The PDO switched to a negative value in the fall of 2016, while the AMO has been positive since 1998. Read more

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Canada Markets

Percent Change in January Grain Prices

With January 2017 just around the corner, here is a look at how futures markets for selected grains tend to act during the month, while considering the percent change in price over January on the continuous monthly chart. On average, over the past five years, both canola and corn futures tend to close higher in January, with the canola future averaging a 0.5% increase in January, while corn futures have average a 0.9% increase. Read more

Iowa Farmland Values Slide for Third Straight Year

Gains in Canadian farmland values may be slowing; in Iowa they are continuing to slide.

According to the results of an Iowa State University survey released this week, the average value of Iowa farmland has shown a decline for the third year in a row — the first three-year losing streak since the 1980s farm crisis. At US$7,183, the average per acre price of farmland in the state was down $449 or almost 6% from November, 2015 and is now 17.5% below the historic high of $8,716 reached in 2013.

“The golden era of phenomenal, yet abnormal growth in farm income and land values, as we saw from 2006 to 2013, is already behind us,” said Wendong Zhang, assistant professor of economics at Iowa State University, who led the annual survey. “The land market is going through an orderly adjustment while the U.S. agricultural sector, a competitive industry, is trying to adjust to the old normal of zero industry-wise net profits.” Read more

South America Calling

Favorable Rain Boosts Brazil Crops

Private Brazil crop analytical firm Safras and Mercado put a new benchmark on Brazil soybean production at the end of the week. The projection from this firm is 106 million metric tons — a new record and well-above the 96.50 mmt crop estimate for the 2016 harvest. The Safras projection is 4 mmt above the latest USDA figure in its World Agricultural Supply and Demand Estimates (WASDE) report. Read more

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Canadian Dollar May Hang Tough Against a Hawkish Fed

The Canadian Dollar weakened against the USD as did the rest of G10FX when the Federal Reserve signaled a more hawkish/ steeper dot plot than expected. The Canadian Dollar had Bullish momentum backing it going into the meeting on the back of the December 7 Policy Statement where the Bank of Canada noted that they are focusing on slack that remains in the Canadian economy and omitted the “at present” phrase when discussing possible rate cuts to stimulate the economy. Read more

CBOT weekly outlook: Soy, corn watch South American weather

CNS Canada — Soybean futures at the Chicago Board of Trade moved lower during the week ended Wednesday, while corn held steady, with South American weather conditions expected to provide much of the direction going forward.

“We’re pretty much trading one weather report at a time,” said Sean Lusk, director of commercial hedging with Walsh Trading in Chicago.

While dryness concerns in Argentina provided some support for soybeans in recent sessions, forecasts are improving in the major export nation. Early crop projections out of Brazil also remain large overall. Read more