The Good: Canola finally found a bottom today with nearby July futures stopping the bleeding of the past four sessions. Declaring victory seems a little too late as today’s close fo C$871.80 per tonne was just above the contract value at the beginning of the month. July certainly is the casino contract and the volatility we saw this week was only a start of the crazy trading days ahead in the contract. This is the main reason that the commercials have moved positions to the November contract.
The Bad: Spring wheat futures closed the day down slightly after trading higher for most of the day. The market seems to be dismissing the dryness in the Northern Plains as spring wheat futures dropped by more than 50 cents per bushel this week. The September Minneapolis contract closed the session at US$7.465 per bushel, which is lower it was trading at the beginning of the month. This certainly doesn’t look like a market that is intent on pushing a weather premium into spring wheat markets. Maybe we’ll get serious about the situation in June.
The Ugly: The U.S. NWS 6-10 day forecast is certainly ugly for the eastern growing areas of the Northern Plains and the Canadian Prairies. The U.S. Corn Belt is also expected to be warmer than normal, but the moisture situation is not nearly as dry as the Northern Plains and the eastern Prairies. On the bright side, early season growth will advance quickly under the warm temperatures. The only problem is that crops need moisture to grow!