The Good: The July canola contract got off to a rocky start today, but managed to finish the day up C$9.70 per tonne to close at C$716.12 per tonne. The commodity markets are going to be very volatile as we move through the remainder of the crop year. The move higher today was important from a technical perspective as the chart is establishing a classic head and shoulders formation, which would be confirmed if the contract moves below the C$700 per tonne level. Given how volatile the market has been over the past two weeks, that is too close for comfort. The markets will likely remain rangebound until Wednesday when the market will respond the the USDA stocks and acreage report.
The Bad: The improvement to the crop conditions in the Southern Plains continued last week with Kansas jumping five per cent to 50 per cent good to excellent. Crop conditions in Kansas have now moved close to average conditions for this week in the growing season. This is not unexpected by the market as the recent rains have greatly improved crop conditions in the main HRW producing state.. Kansas was the only state in the Southern Plains reporting an improvement in crop conditions with Oklahoma dropping one per cent to 61 per cent good to excellent. Texas also dropped one per cent to 28 per cent good to excellent. Colorado crop conditions were lowered by five per cent to 28 per cent good to excellent.
The Ugly: The late winter/early spring storm has moved across the Prairies today with winds reaching close to the 100 kph mark in some areas. There are weather warnings stretching from central Alberta to eastern Manitoba. The weather bomb will bring welcome precipitation, but the snow will not cover the fields for too long. The return to winter will be brief as the system will move out of Manitoba by tomorrow evening. Temperatures are expected to return to above normal levels by Wednesday/Thursday to most Prairie locations.