The Good: November canola eked out a slight gain today as the lack of U.S. market activity kept trading in the contract mostly rangebound. Palm oil and European Matif rapeseed values were lower today which also kept a lid on any notion that canola prices would move higher. Given that the weather forecast is calling for temperatures in the 30’s later this week one would think that canola would have received a little pop from weather concerns. I guess the canola market wants to get the support from U.S. markets before pushing a weather premium into the new crop contract.
The Bad: The rains in mid March were good, but the weather during the next week will test the soil moisture supplies across the Prairies as temperatures move over the 30C mark for the first time this growing season in many locations. The hot weather will be accompanied by little in the way of precipitation this week with only scattered rains expected across the northern growing regions. The map below shows the moisture deficit since the beginning of April, which is showing only a few areas with surplus precipitation over the period. The driest areas remain in Manitoba, which has 25 mm to 50 mm deficits despite the rains last week.
The Ugly: The June forecast from NOAA is good if you like warmer than normal weather, but its not really good for farmers trying to grow a crop. Above normal temperatures are expected during June for much of the western U.S., Northern Plains and northern Corn Belt. The only are expecting below normal temperatures is the Southern Plains, which is currently harvesting the HRW crop. The Southern Plains are also expecting above normal precipitation during the mont, which may lead to quality concerns for the HRW wheat crop. NOAA expects normal to below normal precipitation in the Northern Plains over the next month. This is not a good forecast for U.S. winter and spring wheat prospects.