The Good: Spring wheat December futures were actually higher today with the contract gaining one cent per bushel. This resulted in the contract closing the day at US$5.56 per bushel. This is good news as the winter wheat contracts in Chicago and Kansas City futures dropped by 19 to 20 bushels per acre and 17 to 18 cents per bushel, respectively. The wheat markets were pressured by the corn market dropped by seven cents per bushel. The fact that spring wheat managed to trade unchanged to higher in the face of large losses in winter wheat was very good news.
The Bad: January canola futures dropped by C$6.70 per tonne during today’s trading session which pushed the contract to settle at C$633.70 per tonne. This pushed the contract down close to the 20 day moving average which lies just below the C$6.35 per tonne level. The pressure in canola came from a sharp drop in the soybean market which was down by 25 to 27 cents per bushel in the nearby contracts. Soybean futures are under pressure as the market is disappointed with the slow pace of purchases to date.
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The Ugly: The monthly export data by destination was released today and Chinese exports remain the slowest since 2016-17 crop year. The drop in exports is not only related to canola and pea tariffs, but also reductions in all other crops with the exception of wheat and barley. Wheat exports to China for the first two months of the crop year totaled 175,800 tonnes. The ugly news is that the U.S. sold 120,000 tonnes of wheat to China during the past week, including one cargo of DNS wheat. The ugly news is that China is in the process of cutting off Canadian purchases and recognize that U.S. purchases will give then some leverage when negotiations restart between the two countries. Thank goodness that wheat markets are well diversified with Bangladesh, Spain and Japan the three largest purchasers so far this crop year.
