The Good: The markets today were positive, but the number to look at is the July canola contract that settled up C$42.40 per tonne to close at C$1,005.90 per tonne. That’s right over a grand per tonne. Cash prices are even better than the new crop futures with bids in the C$23.74 to C$24.25 per bushel range. It was not all good for the canola market as the new crop November contract dropped C$9.50 per tonne to close at C$752.10 per tonne. Obviously, the market feels that canola stocks will be plentiful in the fall.
The Bad: The long term weather models are becoming warmer for the growing season in Western Canada. Temperatures for the rest of May look to be close to normal for Western Canada, but the June, through August period looks to be warmer than normal, especially in the Northern Plains of the U.S. The precipitation forecast for the summer is calling for below normal rainfall during the same period. Long term forecasts are certainly not reliable enough to make decisions about agronomy and marketing, but this certainly points to increased risks for the wheat crop in the U.S. and Canada. The spring wheat market today was up nine to ten cents per bushel, but lost ground to the Chicago and Kansas City contracts.
The Ugly: Estimates for the Brazilian corn crop continue to drop as dry conditions prevail over most of the main growing areas. MarketsFarm has reduced the corn production estimates for Brazil by 6.0 million tonnes this week to 95 million tonnes. The USDA is currently at 109 million tonnes, but that estimate will be reduced next week Look for USDA to drop the corn estimate for Brazil to 105 to 107 million tonnes. Remember that USDA makes changes gradually and they need to see the impact of the dryness on the late planted corn before making a substantial move lower. The global corn situation for 2020-21 is likely to tighten substantially in the report as the U.S. ending stocks are likely to drop by one to three million tonnes.