The good news is that there is a lot less worry about the weather this spring and feed costs for livestock producers should be falling.
The bad news is that fears of another year of drought are fast becoming a memory and crop prices are falling.
In Western Canada, the only places with lingering moisture problems are the area southwest of Winnipeg and the northern part of the Alberta-Saskatchewan border region. Both enjoyed good precipitation in the last 10 days.
In Australia, they are not yet ready to say the drought is officially over, but more rain last weekend helped buoy crop prospects.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
The American plains states have received good rain in recent weeks, much improving the outlook for winter wheat, which had suffered through a dry winter.
Seeding conditions were expected to be good this week in the corn and soy regions of the Midwest.
And speaking of soy, the South American harvest is proceeding smoothly with yield losses caused by Asian rust in some areas offset by higher than expected yields in other regions.
North Africa, an important market for Canadian durum, is about to take in an excellent crop, the first after a string of drought-ravaged harvests. The impact of this is seen in the Canadian Wheat Board’s falling Pool Return Outlook for durum.
The only places where cropping prospects are not improving are in the European Union, Russia and Ukraine.
Dryness in Germany and France has farmers nervous, but the concerns haven’t reached the point where officials would rein in subsidized exports. Just this week, the EU sold 120,000 tonnes of French wheat to Egypt, traditionally a loyal buyer of American wheat.
Indeed, Egypt, with annual imports of about seven million tonnes, has decided to diversify its grain sources. It is negotiating a five-year deal to buy up to 1.5 million tonnes of Russian wheat a year. It is also showing interest in Indian and Pakistani wheat.
While in the long term Russia is expected to be a competitor in world wheat markets, winter was not kind to the Russian and Ukraine wheat crops this year.
Expectations are that they will be much smaller players this year in the export market.
But recovery in North America and Australia should more than make up for the smaller Black Sea region crop.
