Canola and rapeseed futures handed back a bunch of value last night. Paris was sharply lower, down €12.75 in the Feb 25 slot, Winnipeg was worse, shedding C$23.40 per tonne in the January slot. Combine these reductions with a slightly firmer AUD, and cash prices in both Canada and Europe following the trend in oil seeds futures lower, and we have a dim outlook for local values here on Monday.
The futures market is doing what the futures markets name suggests it should do, looking forward. US soybean sales for the old crop have been good considering the size of the S.American soybean crop. US exports are closing in on the USDA projected export total for the 2023 crop, with 98% of the forecast complete with a month and half to go.
This isn’t the case for the new crop sales program though. US soybean export sales for the new crop are just 2.9mt, down 30% from this time last year for new crop sales. Weekly sales are poor, very poor, the worst in 20 years.
This, combined with the increasing production capacity from S.America, will continue to be an anchor to the oil seed market in the mid to long term. Potentially hurting the ability for canola to recover along the way or until demand can increase to counter the current production improvements.
US wheat futures had their own basket of bearish fundamentals to contend with. The US spring wheat tour wound up on Thursday. Their average yield calculation came in at a record 54.5bu/ac for the event, it’s been going since 1992. The 2024 average is around 12.5bu/ac above the 5 year average. It turns out that rain does make grain. Let’s see how good the spring wheat farmers controlled fusarium when the headers get rolling.
International wheat prices trended lower in the Black Sea and Europe. Paris milling wheat futures were lower but not dollar for dollar with US moves thankfully.
Producers across the Canadian Prairies suggest that state and federal forecasters have it wrong. The hot dry period over the last week or so has done significant damage to maturing wheat and durum crops in many locations. Some producers stating they have lost up to 30% of potential in 7 days.