The Good: Canola futures hit the ground running in the overnight session and managed to hit an intraday high of C$705.70 per tonne, before dropping back to close at C$693.20 per tonne. The main feature of the trade today was the independent strength of the canola market, although soybean oil and soybean futures managed to catch up during the session. March soybean oil futures also closed at a contract high today. Statistics Canada reported that December monthly crush hit a record (for December) 904,577 tonnes. Despite the higher prices this year, crush margins have been good and total crush is 161,310 tonnes ahead of last year.
The Bad: Despite the rally in the corn market, wheat seemed to be a reluctant follower. And if wheat was a reluctant follower, spring wheat was downright slow in responding to the 20 cent rally in the corn market. Spring wheat finished the day up 12 cents per bushel to close the day at US$6.38 per bushel. Despite the rally, wheat is still below the highs established last week. Statistics Canada also released their milled wheat and flour production statistics. As with canola, wheat processing during December hit ten year highs and is currently 50,000 tonnes higher than last year. Spring wheat continues to get no respect when it comes to the U.S. futures markets.
The Ugly: The forecast for southern Brazil and Argentina continues to be wet for the next week with above normal precipitation expected in both regions. The main winner, if the forecast comes to fruition, will be Argentina. Soil moisture levels are marginal in the main soybean growing areas and above normal precipitation is needed to stabilize the crop.