The Good: European rapeseed futures hit their highest value since 2012 as the May contract closed at 516.5 Euros per tonne. European rapeseed stocks dropped to 8.7 million tonnes in January, which was down 400,000 tonnes from last year. This likely means that European demand for Canadian canola will be strong through the end of the crop year. This is one of the reasons that Canadian futures values are in rally mode is that supplies are being pulled out of the Prairies from both the east and west coast markets. Canola exports to Europe for the crop year to the end of January was 1.476 million tonnes which is slightly larger than the purchases from China.
The Bad: U.S. wheat sales were disappointing as only 219,200 tonnes of old crop and 23,500 tonnes of new crop were reported by USDA for the week ending on February 25th. Spring wheat sales were very disappointing as the weekly volume totalled only 68,384 tonnes (see more on that below). With U.S. soybean sales slowing down and Gulf logistics favoured for corn movement, U.S. wheat sales were expected to pick up by now. The delayed Brazilian harvest has kept U.S. soybean exports at relatively high levels and wheat continues to suffer from a lack of export capacity. Maybe this will improve in March!
The Ugly: The ugly part of the U.S. export sales report was that Canada was the second largest purchaser of U.S. HRS after Japan. The sale was reported as 27,998 tonnes (approximate laker size). This may be an export sale improperly reported, but it could also be an eastern miller playing cheeky bugger with Canadian elevators. The trade does make sense in that Canadian spring wheat elevator bids in the eastern Prairies are about 25 to 50 cents (Canadian) higher than U.S. cross border bids.