The Good: Lost in all of the market news today was the update from the CGC on weekly exports. Barley exports so far this crop year have hit 1.599 million tonnes by the end of week 21 (December 27th). Exports for the two week period ending on December 27th, were 152,700 tonnes, which is 17 weeks ahead of last year’s barley export pace. The barley export pace is expected to continue at a strong pace as China continues to import barley due to the ban on Australian barley. Barley supplies are tightening on the Prairies and prices will continue to be supported by strong export and domestic demand.
The Bad: The canola market was like a New Year’s resolution today. It off to a strong start and then quickly failed by the end of the session! The market moved lower through the day as soybean oil followed crude oil futures lower. March canola finished the day at C$635.70 per tonne after flirting with values just under the C$650 per tonne level earlier in the session. Soybean futures also dropped during the day, but managed to settle up two to four cents per bushel. A reminder needs to be sent to the canola market that valuations compared to soybeans are becoming very cheap with the spread now only at C$19.12 per tonne in the March contract. Canola exports remain 1.4 million tonnes ahead of last year at this time, so it doesn’t make a lot of sense to push canola lower at this time.
The Ugly: The main Russian winter wheat areas remain dry through this winter season. December precipitation was below normal across the grain belt with the driest areas in South Russia and Krasnodar. Temperatures have remained mild so far this winter, with the cold air contained in the spring wheat growing areas of Siberia. The lack of rain/snow is not a concern for the crop unless cold temperatures move into the western growing areas of the country in the coming weeks.