US wheat futures pushed lower again, finding little assistance from the weaker US dollar. Canola futures at Winnipeg and rapeseed futures at Paris both managed the close in the green. The later up E3.00 on the nearby. The Paris move equates to an equivalent AUD move, when taking the AUD / Euro movement into account, of roughly +AUD$3.27. Durum wheat values at both French and Canadian ports were lower.
The consensus appears to be that funds are reducing longs in the oilseed market while rebuilding short positions in both wheat and corn futures. The US will need to convert expected sales of US soybeans to China to actual sales if they are to stop the fund selling in oilseed futures.
There was speculation that the US would benefit from logistical delays in S.American exports, but this speculation hasn’t really been justified yet. Brazil have shipped over 100mt of soybeans globally this season, the lions share going to China. The US is backing China will again soon appear in significant volume on their sales sheet for soybeans.
This weeks outlook for rain is good for both Argentina and Brazil. Combined these two countries could produce in excess of 200mt of soybeans if this weeks rain comes to fruition. A S.American crop of this magnitude will weigh on global oilseed values for some time.
One glimmer of hope in oilseeds came from the announcement that a new processing plant will be constructed on the Canadian Prairies to produce fuel from canola oil. The numbers seem to add up to additional canola demand of around 2mt annually, roughly 10% of the Canadian canola crop, once the plant is operational. The biofuel carrot has been hung in front of a lot of industries, some fairing better than others, time will tell if this plant is an additional demand point, and will reduce Canada’s reliance of canola exports, or if it will stimulate additional canola acres to be sown.
Germany and Poland are expected to see good rain over the next 7 days while the NW of France see’s little after a very wet winter sowing program there.