The Good: Lost in the flotsam of the holiday weekend and USDA reports was another strong week of canola exports. Exports of canola last week were good at 207,300 tonnes which pushed the crop year to date exports over the 10 million tonne mark. The total bulk exports so far this year are now 10.041 million tonnes with five weeks left in the marketing year. There is still over one million tonnes of canola in the commercial system (excluding crusher inventory) so there are plenty of stocks to hit the current export target of 10.9 million tonnes. Nearly all of the canola during the past week was exported from Vancouver and Prince Rupert, which currently have 181,600 tonne of canola in store. The hot weather last week pushed canola development across the Prairies, which increased the chances of an early canola harvest. The only problem with the potential early harvest is that yields undoubtedly were impacted by the hot weather last week that stressed the crop.
The Bad: The canola market appeared to be a bit lost today as big brother soybean and soybean oil futures were closed. With European rapeseed markets down by nearly three per cent, the markets headed lower. Canola markets in Canada were also down on the idea that the cooler temperatures this week will help the crop. There is a forecast for rains, but the best chances are in the southern growing areas and not the main canola belt. Whatever the reason, November canola finished down C$29.50 per tonne on the day with the contract settling at C$801.40 per tonne. Trading in the U.S. market doesn’t start until tomorrow morning, so the overnight session will be another volatile one for canola.
The Ugly: The first potential hurricane of the season (Elsa) is currently making its way across Cuba as a tropical storm. The storm should gather strength when it moves over the water in the eastern Gulf of Mexico. The storm is expected to travel up the western coast of Florida before making landfall north of Tampa. This storm should not impact commodity markets as it won’t hit grain or oil infrastructure, but it is a worrying sign of heightened tropical storm activity this year. Note that Elsa is the fifth named storm so far this hurricane season. The season officially begins at the beginning of June, so there has been an average of one tropical depression per week so far this season. The hurricane season finishes at the end of November.