The Good: Spring wheat markets continued to rally for the fourth consecutive trading session. That allowed the September wheat futures to push to a new contract high of of US$8.73 per bushel. Winter wheat markets were even stronger today with Kansas City up 16 to 17 cents per bushel while Chicago wheat futures were up 19 to 20 cents per bushel. The winter wheat rally today was a good sign that the bottom is beginning to form. The winter wheat harvest is 59 per cent complete with the HRW harvest now moving into the northern HRW states. The South Dakota and Montana harvest are 22 and 1 per cent complete, respectively. Given the hot and dry weather forecast for the Northern Plains, the harvest will quickly move to completion in the coming weeks. Harvest pressure seems to be officially over in the winter wheat markets.
The Bad: The canola market was ugly today, but soybeans and soybean oil finished higher. This pulled back on the premium for canola versus soybean futures to C$257.38 per tonne. Don’t get me wrong – this is still a premium that will still discourage canola use, but the market needs to maintain a significant premium to soybeans to discourage demand. Canola futures are likely to remain very volatile as the market tries to determine the actual size of the crop. At the end of the day, canola production will not be close to the amount required to satisfy demand. That means that today’s sell off in canola is a speed bump in the way to higher prices.
The Ugly: Unless you are camped out in the Rockies, you are under a heat warning today if you are located in the Prairies. No matter where you are located in the Prairies, – south, north, east or west it really doesn’t matter, because you are under a hear warning. The warnings will be dropped for parts of Alberta by Friday, but the rest of the Prairie region is likely to remain under the warnings well into next week. This is an exceptional situation for the Prairies as usually there are some corners of the region that don’t hit the metrics for the heat warning. This is a sign of how extensive the heat dome is across the Prairie region. This is not good news for the crops in Western Canada this year.