The Good: The May canola contract closed at yet another contract record at C$796.10 per tonne. It isn’t just the Winnipeg canola futures that are moving to new contract highs today. The Matif May rapeseed contract gapped higher today and closed the day at 525.75 Euros per tonne. The reason for the increase in the Matif contract was the lower ending stocks projection for the current crop year. In some respects, the European rapeseed market is playing ping-pong with the ICE canola futures contract. The European market rallies and the Canadian market follows suit. The European market then rallies on the increase in the Canadian canola futures. This never ending cycle will only stop when the global vegetable oil prices begin to decline. May soybean futures closed the day at, you guessed it, a new contract high of 52.46 U.S. cents per pound.
The Bad: The wheat market continued its Jekyll and Hyde routine with nearby May futures dropping by 3.5 cents per bushel to close at US$6.41 per bushel. No earth shattering data is expected tomorrow for spring wheat, but the the prospective plantings and stocks report will likely cause the market to take notice. Many analysts are now forecasting that spring wheat will hit record lows for planted area. That doesn’t really sound like a prescription for comfortable wheat stocks in 2021-22. Not that anyone in the market really cares about spring wheat production or area!!
The Ugly: The models continue to point to dry, warm conditions for the next week in Argentina and southern Brazil. The dryness will help harvest progress in Rio Grande do Sul, but the dry weather in Argentina is hitting the corn and soybean crops during the filling stage. The harvest in Argentina is still two to three weeks away and will continue through the month of April. If rains come by the middle of the month, then it will be too late to add any meaningful yield potential.