The Good: Maybe it has all the whining that I have done about undervalued spring wheat in the past months that boosted spring wheat futures today. More likely it was the realization that spring wheat didn’t fully participate in yesterday’s rally. Whatever the reason, Minneapolis March futures closed the session at new contract highs at US$6.29 per bushel. With nearby cash prices the seven to eight dollar per bushel range in Western Canada, spring wheat is beginning to stage its own version of a vertical rally. Instead of climbing a mountain, spring wheat may only scale a steep hill.
The Bad: The internet is full of stories about the great pasta shortage (Bucatini), but there shouldn’t be a any plates empty in Italy. CGC export data to the end of November indicates that Italian crop year to date exports are the largest in the past 10 years. Italy has also imported 363,945 tonnes of U.S. durum that has been shipped so far this crop year. Unfortunately the great Bucatini shortage in the U.S. is at least partially driven by customs issues with Italian pasta.
The Ugly: Temperatures across Northern China, Japan and South Korea have been in a deep freeze for the past month. Minimum temperatures last week ranged between -10C and -30C in northern and central China. Winterkill is a concern in the northern winter wheat growing regions around Beijing. The cold weather is not ideal for the winter canola crop that is grown in the south central growing regions of the country. Unlike winter wheat, canola can’t withstand temperatures in the -10C range for very long. Keep and eye on this one.