The Good: Canola futures posted gains of C$8.80 per tonne to close the session at C$690.80 per tonne. The gains in canola came despite losses in the soybean market with nearby futures trading down by 3.0 cents per bushel. Support came from gains in the soybean oil market which pushed up by 0.6 cents per pound to settle at 54.42 U.S. cents per pound. The good news is that the recent strength in the soybean oil market will continue to support canola prices in the coming weeks/months.
The Bad: The spring wheat market remained under pressure today and closed just above the psychological US$6.00 per bushel mark. The spring wheat close was the lowest September contract price since the third week in May. The weakness in spring wheat is partially due to the impending harvest in the southern growing areas. The contract is well below the 20 and 50 day moving averages which are proving little in the way of support for the contract. That is bad news for the spring wheat contract.
The Ugly: The spread between Minneapolis and Kansas City September futures narrowed to 70 U.S. cents in favour of the spring wheat contract. This is close to the recent lows in the spread that were set in the middle of June. The ugly news is that spread is likely to narrow even further in the coming weeks. Winter wheat harvest is close to normal at 63 per cent complete with the Kansas harvest hitting 93 per cent complete. Spring wheat harvest is just getting underway in South Dakota which means that Minneapolis futures will soon begin to receive significant harvest pressure. This will put additional pressure on the spread and likely force it down towards the 50 cent per bushel level.
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