The Good: Canola had a bounce back day today with July futures up C$24.60 to close at C$726.20 per tonne. The roller coaster ride of old crop canola futures continues with the move today trading back to the highs established on Friday. The fundamentals really haven’t changed over the past number of weeks. Canola exports remain strong and domestic crush continues to set new records. February crush numbers for canola were down from January and last year, but were strong given that the month had one less day than last year. New crop fundamentals are still not reflecting the increased crush margins and pervasive dryness across the Prairies.
The Bad: Despite higher Minneapolis and Chicago wheat markets, Kansas City futures dropped today with nearby contracts off two to three cents per bushel. USDA delivered another increase in crop conditions in Kansas, with the wheat crop improving to 54 per cent good to excellent. Crop conditions are now in a tie for the highest crop condition rating for this week in the growing season. The tie is with 2016 and 2019 growing seasons which yielded 49.5 and 48.2 bushels per acre, respectively. If yields in 2021 are anywhere close to those years, production and stocks will end up between 850 and 900 million bushels. Now that would be bearish for the wheat markets in North America.
The Ugly: The most common question on farmers’ minds is “when are the rains going to come?”. The winter precipitation (November through March) is now in the books and the picture for the Prairies certainly paints an ugly picture. With the exception of west central Saskatchewan and north central Saskatchewan, winter precipitation is well below normal. The two driest areas of the Prairies are located in Manitoba, southern Saskatchewan and southern Alberta. Winter precipitation is also well below normal in central and northern Alberta. Rains are needed soon in order to get at least some starting soil moisture for the 2021 crop.