The Good: Spring wheat futures moved up by seven to eight cents per bushel with the March contract closing at US$5.83 per bushel. The gains in spring wheat were limited when compared with winter wheat futures. Chicago and Kansas City futures were up by 13 to 15 cents per bushel. The gains in spring wheat were supported by the USDA outlook conference that projected total U.S. wheat acreage at 45 million acres. This projection assumes a miniscule reduction in the combined spring wheat and durum (less than 50,000 acres). This is surprising as USDA also forecast a 4.8 million acre increase in soybean area. Some of the acreage in spring wheat will likely be switched to soybeans in the Northern Plains given the current price spread between the two commodities. The market apparently also believes that the wheat estimates are too high.
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The Good, Bad & Ugly
The Good: Wheat markets had a good day with nearby spring wheat July futures jumping by 13 cents per bushel to…
The Bad: The nearby canola contract closed up by C$2.40 per tonne to settle at C$6.73.10 per tonne. The bad news was that canola failed to keep pace with soybeans and soybean oil which staged yet another rally today. Soybean futures were up eight cents per bushel while soybean oil futures closed up by 1.9 per cent. Canola futures are struggling to keep up with the gains in the soybean complex. Canola should be supported by soybean oil futures which are trading just under the 60 U.S. cents per pound level. Nearby soybean oil futures are trading at their highest level in over two and a half years. On the other hand canola is only trading at seven month highs.
The Ugly: Canola exports during week 28 were strong at 257,100 tonnes. This is the largest canola export number of the crop year and it pushed the total crop year to date sales to 4.025 million tonnes. Undoubtedly some of the canola was destined for Chinese ports as the ships would arrive after the export tariffs are lowered to 15 per cent according to the recent Canada-Chinese agreement. The exports during week 28 were primarily from Vancouver with terminals shipping 251,300 tonnes of the total. Primary elevators shipped a total of 5.100 tonnes of canola to U.S. and /or Mexican destinations. The ugly news is that the canola export surge maybe temporary with primary elevators seeing a drop in Canadian deliveries to primary elevators to only 374,800 tonnes.
