The Good: The spring wheat market continues to push higher as the May contract has now recovered most of the losses experienced over the past month. MarketsFarm (and readers) have been asking when the market would acknowledge the dry conditions in the Prairies and Northern Plains of the U.S. The answer seems to be in the past two days as the nearby Minneapolis contract settled at US$6.4025 per bushel. This is the highest close for the Minneapolis May contract since March 10th. The real drive of the wheat market today was corn, which was up 16 to 19 U.S. cents per bushel on the day. Winter wheat prices are at the narrowest spread to corn in the past eight years.
The Bad: The November canola contract was up C$0.50 per tonne today as the nearby contracts were off to the races. In light of what is happening in the wheat contract concerning a weather premium, it is obvious that canola traders are not at all concerned about the impact of the dry spring on the crop. Board canola crush margins for November were C$148.86 per tonne, which is still close to double last year. Perhaps the canola market needs to add a wee bit of a weather premium given how tight the canola situation is going to be at the end of this crop year. Canola exports over the past week were a mere 298,100 tonnes which pushes total exports to 8.19 million tonnes for the year.
The Ugly: The European weather is expected to experience below normal temperatures for the next week, after cooler temperatures this week. Freezing temperatures were common this week and the forecast calls for lows in the 0C to -5C for much of next week in northern France and Germany. The cool temperatures will slow crop growth and may cause some damage to the winter rapeseed crop, which is mostly in the rosette stage at this point in time. Think of these temperatures as being much like a mid June frost on the Prairies. The only issue is that the frosts will occur for nearly two consecutive weeks. Damage will range from region to region, but there will be some impact on plant populations.