Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The canola market was smoked today with nearby futures down C$14.80 to close at C$781.50 per tonne. There was little in the way of good news for canola, although exports continue to push higher as we move later into the crop year. The canola exports last week dropped to 129,100 tonnes last week, but supplies are accumulating in Vancouver, Prince Rupert and Thunder Bay terminals. With the seaway now open, canola receipts at Thunder Bay were 14,500 tonnes to push stocks to 270,300 tonnes. This is an indication that the export (and eastern crush) pace is likely to be very strong over the next few weeks. Canola fundamentals remain strong despite the gyrations of the futures market.

The Bad: The spring wheat market moved lower this morning as concerns about improving crops around the globe. The IGC global wheat estimate is currently 790 million tonnes, which is a record. The improving conditions in the U.S., Europe and the Black Sea region are providing a drag on prices, with importers beginning to put off purchases until the arrival of new crop wheat. The concerning point is that the spring wheat areas in North America are very dry going into planting season. Sown area is already expected to drop this year due to competition from other oilseed and cereal crops. Although the spring wheat situation is not bearish, the overall  wheat values are certainly moving  lower.

The Ugly: The U.S. dollar continues to rally as the European economies begin to soften due to the emergence of new variants. The vaccination pace is Europe is very slow when compared with the U.S. pace. The news is driving the currency markets with the dollar index hitting 92.85 points. The rally this week has opened up a move to the 94 point mark in the coming days/weeks. The improvement in the U.S. economy is likely sustainable as over 25 per cent of the adult population has now received their first dose. This will allow large portions of the economy to return to normal by the beginning of summer. The stronger U.S. dollar will certainly provide some headwinds for the commodity markets in the coming months.