The Good: What goes down, must go up was the mantra of the market today. And no commodity in the agricultural space rallied as much as canola today. Nearby futures settled up by over four per cent to C$675.70 per tonne. Today’s gains almost made up for the losses posted last Thursday and Friday. The canola market was supported by soybean and soybean product futures which were also up sharply on the day. Soybean oil managed to move 1.6 per cent higher on the day, which helped push canola values higher. The canola markets will likely see even more volatility in the coming weeks as it looks for signs that prices are slowing demand for both exports and domestic use.
The Bad: The was plenty that was positive for the spring wheat markets today with nearby futures moving up by 13.5 cents per bushel. If you look at the July futures spread with Chicago, you wouldn’t know that spring wheat has been slowly outperforming the Chicago contract. At least spring wheat is now trading higher than Chicago, but the current premium is only five cents per bushel. There is still a long way to go to get to a normal spread of 45 to 60 cents per bushel.
The Ugly: The forecast for the next week in southern Brazil calls for above normal precipitation for the coming week. Markets are losing interest in South American weather as the harvest gets underway in earnest in northern Brazil. The drier than normal conditions this week in Mato Grosso should help boost harvest progress in the northern growing areas of Brazil. Wet weather in southern Brazil will help soybean crops in the region which are in the pod fill stage. Argentina is still relatively dry and will see mixed weather over the next week.