The Good: China continues to be the lead destination for Canadian exports with total exports this crop year hitting 9.23 million tonnes at the end of June. This the fifth largest crop year exports to China in the past 10 years. Canola exports to China this crop year are slightly higher than last year at 4.57 million tonnes. Exports to China did drop during June by 207,100 tonnes and totaled 456,700 tonnes. The drop in exports is due to the fact that wheat and rapeseed harvests are now complete in China. This reduces the demand for Canadian imports. The good news is that China remains a key components of Canadian demand.
The Bad: The November canola futures contract dropped by C$2.50 per tonne in today’s session and closed the day at C$669.70 per tonne. Soybean futures closed down by six to seven cents per bushel while soybean oil futures were mostly mixed. European rapeseed futures also pressured canola futures today by losing 1.2 per cent. The bad news is that canola closed below the critical C$670 per tonne level. This opens up canola to trading down to the C$650 per tonne level in the coming weeks.
The Ugly: The Chicago wheat contract hit a five year low today before trading back to unchanged on the day. Kansas City futures closed up by six to seven cents per bushel, but that failed to support Minneapolis futures contracts. Minneapolis closed down by one to two cents per bushel on the day. The failure of spring wheat to rally with the winter wheat contracts is ugly news for spring wheat. The long term chart below shows that spring wheat futures are trading near the 2024 lows. This leaves spring wheat futures to trade in the US$5.00 to US$5.50 per bushel range in the coming weeks.
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