The Black Sea issues have dominated the markets for a long time. Recent escalation has seen port infrastructure for both Russia and Ukraine destroyed and both sides have sunk ships transporting goods.
The weather doesn’t make great headlines unless it can confirm climate change, or a possible natural disaster unfolding …due to climate change…. The media often dwells on the immediate nature of weather. A tornado here, a flash flood there, concentrating on the human loss. They rarely extrapolate the whole story, the loss to agriculture, the loss that brings to an economy, the impact that has down the line. I guess the climate change narrative has at least bought some attention to this.
Take the drought in France, it has decimated summer crops, but it has a bigger impact that flows down the line. The Danube River is a great example. The issue Ukraine is having with port logistics is being exacerbated by low water in the Danube. Ships simply can not load Ukraine wheat out of Romania at the rate that which they are set up to do as the river will not allow this.
While the world has been focusing on the Black Sea availability issues another weather event is unfolding across parts of Canada. The season in Canada has been testing for many, too dry, too wet and now the headers are moving into the fields we have rain downgrading crops across much of Saskatchewan and Alberta. 14 day rainfall totals for much of Sask exceed 75mm. The 7 day forecast predicts a slightly drier pattern, possibly allowing field work to commence again and the market to get a handle on what quality wheat and durum Canada will have this year. The harvest was roughly 20% complete prior to the rain, so there is plenty at stake for one of the worlds larger wheat, barley and canola exporters.
Winnipeg canola futures closed +CAD$15.60/t in the January slot. The ex farm market followed, gaining on average CAD$13.58/t to close at CAD$788.89/t out of SE Saskatchewan. What has durum wheat done, nothing, nothing at all. 1CWAD13 is bid CAD$28.00 less than 13.5% spring wheat, it’s a steal.