The Good: Spring wheat traders found out how volatile trading a long term forecast (7-14 day) can be as models turned drier overnight which pushed spring wheat higher. The 2021 growing season will likely be one big weather market through the summer months, so be prepared for the roller coaster ride over the next three months. The July contract closed up 17.25 U.S. cents today which clawed back over one-third of yesterday’s losses. Wheat futures are waiting for the crop production report on Wednesday that will provide the first glimpse of winter wheat production. Spring wheat estimates will not be provided in the report, but HRW production will be of keen interest. The average HRWt production estimate is 711 million bushels, which is 52 million bushels higher than last year. Increased wheat feeding in the first quarter of the 2021-22 crop year is likely to consume most of the production increase.
The Bad: The rains on the weekend in the western Prairies certainly helped boost topsoil moisture levels, but the net gain in moisture over the past 30 days has been relatively small. The largest gains over the past 30 days were in southeastern Alberta and northwest of Edmonton, where precipitation has been 5 to 15 mm higher than normal over the past month. The rest of the Prairies has been drier than normal this spring with deficits ranging from 5 mm to 40 mm. The driest areas over the past 30 days have been in Manitoba and parts of northwestern Saskatchewan. Another few weeks of dry weather across the Prairies and this map will go from Bad to Ugly in a hurry.
The Ugly: The July canola market was certainly ugly today as selling continued with expanded limits. This resulted in a drop of C$43.30 per tonne to close at C$932.30 per tonne. This was a disturbing sell-off as the July soybean contract rallied 27.25 cents per bushel to close at a contract high. July soybean oil futures were also 1.5 per cent higher on the day.