I hope you followed our online coverage of the U.S. Department of Agriculture’s seeding intentions and quarterly stocks reports released March 31, the day after the deadline for this newspaper.
Those reports will likely dominate the trade this week, but traders are also watching the weather in the U.S. southern Plains, where hard red winter wheat is grown.
It is dry. Scattered showers last week weighed down wheat prices, and Chicago wheat fell four percent over the week, but a new forecast for dry weather this week helped wheat recapture all that ground on March 30.
The highest number of Hessian flies in Kansas in a decade also threatens wheat production, according to news reports.
The good to excellent rating for Kansas winter wheat dropped to 39 percent this week from 41 percent last week.
The Oklahoma good to excellent rating stayed at 44 percent, and Texas was also unchanged at 45 percent.
Wheat price rallies will be limited by strong competition from other exporters that have ample stocks and weaker currencies.
Turning to canola, it is heartening to note the big jump in the domestic crush in the past two weeks.
The crush ranged from 130,000 tonnes to 154,000 tonnes per week in February and early March, but in the week ending March 18 it jumped to more than 160,000 tonnes and last week climbed to a record 162,166 tonnes, according to figures from the Canadian Oilseed Processors Association.
The number should rise further in coming weeks when the new Cargill plant at Camrose opens.
The crush to date for the crop year is running almost six percent ahead of last year, which indicates that Agriculture Canada’s forecast for full year crush of 7.2 million tonnes is easily achievable. Indeed, if the current high level of crush were to continue, the total could be close to 7.7 million tonnes.
However, export shipments to date are a little disappointing. They are running four percent ahead of last year, but the weekly pace will have to increase to reach the Agriculture Canada forecast of 9.2 million tonnes.
That was the case last year when exports during the warmer months near the end of the crop year increased, making up for a slow winter and leading to total exports of 9.164 million tonnes.
If exports do pick up and the current exceptional pace of crush continues, the forecast for year-end stocks could tighten.
Agriculture Canada’s forecast is for 1.45 million tonnes at year end, down from a burdensome 2.36 million the previous year.
A number closer to one million tonnes would certainly support canola prices.