The Good: Canola powered back today and closed the day at C$796.10 per tonne. The canola market is being supported by the soybean oil market which traded close to contract highs in today’s session. Also supporting canola is the dry soil moisture conditions across the Prairies. As we enter the spring planting season, the market is beginning to recognize the need for both increased area and trend yields. This is only the beginning of the volatile canola market between now and September.
The Bad: Spring wheat futures continued to leak lower today as markets continue to be pushed lower by good rains in the U.S. and Europe. Spring wheat futures closed the day at US$6.27 per bushel. The spring wheat futures market continues to be oblivious to the dryness in the Northern Plains and Prairies this year. MarketsFarm forecasts a drop of 3 to 5 million acres of spring wheat in Canada and the U.S. this year, which is going to tighten the spring wheat situation considerably. Unfortunately the market doesn’t really care!
The Ugly: Commodity shipments are pushing the price for ocean freight higher, especially in the Asian basin. The year on year change for fright rates from the PNW to Asia are over 30 per cent higher than last year at this time. The increased freight rates for both Handimax and Panamax sized vessels are due mostly to increased demand from not only grain, but also base metals, fertilizer and coal. Another factor in the increased freight rates has been the increased price for bunker fuel. Crude oil prices are more than three times higher than last year. This is ugly news for the grain markets as the increase in freight rates will push bids lower.