The Good: The good news today was in the canola market which saw nearby futures pushing through the 20-day moving average and closing at C$640.80 per tonne. The 20-day average stands at C$637.79 per tonne and marks the second time in the past three trading sessions that canola futures managed to close above the average. This is good news from a technical perspective and should support the recent rally in November futures. The main driving force in the canola market was a rally in both soybeans and soybean oil. Soybean oil was particularly strong today and posted gains of 1.8 per cent.
The Bad: The spring wheat market closed the day up by four to five cents per bushel with the nearby December contract closing the day at US$5.77 per bushel. The bad news is that spring wheat continues to struggle when compared with the other wheat futures contracts which were up by nine to 10 cents per day in Kansas City and Chicago. U.S. winter wheat exports are strong and are driving winter wheat contracts higher. Logistics issues in the Black Sea region have opened up an opportunity for U.S. winter wheat exports. The bad news is that spring wheat hasn’t been able to take advantage of the situation to the same extent.
The Ugly: The USDA report last week made some major changes to the global rapeseed situation with increased production and ending stocks projected from the August estimates. Global production increased by 1.4 million tonnes to 91 million tonnes. The main increase in canola output came from Canada which was increased by 750,000 tonnes to 20 million tonnes. Output was also increased in Australia, Kazakhstan and Russia. This increase in global stacks spilled over into the ending stocks estimate which rose by 1.51 million tonnes. This pushed the ending stocks to use ratio (expressed to days of use) to 38.8 days which is the highest since the 2023-24 crop year. The increase in the global ending stocks is due mostly to a 1.34 million tonne rise in Canadian ending stocks. USDA rapeseed data is certainly ugly for canola markets in the coming weeks/months.
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