The Good: After getting pummelled yesterday, the May canola contract decided to move back and settle at a new contract high of C$802.40 per tonne. There were a number of factors driving the canola market today, with concerns about the winter canola in Europe and stronger soybean oil markets propelled the contract to new highs. This is exactly the type of volatile market activity that comes with very tight ending stocks for canola. Speaking of tight canola stocks, week 31 exports of canola totalled 254,400 tonnes which pushed total exports to 7.245 million tonnes this crop year. That leaves only three million tonnes of exports left to ship over the next 21 weeks.
The Bad: The crop estimates continue to be lowered in Argentina as dry weather has taken a toll on the soybean crop. Bolsa (Buenos Aires Grain exchange) lowered their projection on soybean projection by two million tonnes to 44 million tonnes. The Rosario exchange had lowered their production estimate by four million tonnes yesterday to reach the 45 million tonne mark. USDA is currently forecasting a crop of 47.5 million tonnes for Argentina. There looks to be little in the way of help for the beleaguered soybean and corn crops in Argentina as rains over the next week are expected to be well below normal.
The Ugly: If you are a cattle feeder or a pig barn operator, the barley situation in western Canada continues to tighten. The exports of barley last week were a modest 62,500 tonnes (one Panamax), but that pushed the total exports this crop year to just under 2.4 million tonnes. Remember that last year, the total bulk exports were 2.19 million tonnes. It looks as if barley exports will continue in the coming weeks as terminal stocks continue to build at Prince Rupert and Vancouver. Feed costs are destined to remain very high through the remainder of the crop year.