Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: Wheat decided to make a bullish move today with winter wheat contracts leading the way. Although spring wheat was a follower, the December contract did move up 16.5 cents per bushel to close the session at US$9.29 per bushel. The intraday trade saw the contract move up to US$9.35 per bushel which is close to the contract for the December contract. The fundamental driver of the market was the USDA small grains report released yesterday, which dropped U.S. production lower than trade expectations. Planting problems in Russia are also behind the move higher.

The Bad: Canola markets had a good week with the November ICE contract closing the day above the C$900 per tonne mark  to settle at C$903.10 per tonne. This is the first settle above the C$900 per tonne mark since the end of August. Despite this good news, the spread between ICE canola futures and their European rapeseed counterpart continued to deteriorate during the week. The spread closed the week at a C$42.31 per tonne discount to European values. While the Canadian contract is blindly following the soybean and soybean products for price direction, the European contract seems to be trading on the global rapeseed shortage.

The Ugly: The move in wheat today was not based on weather concerns, but the U.S. wheat growing areas continue to be hurt by drought conditions. The PNW, Northern Plains and parts of the Southern Plains are in a severe to exceptional drought. Winter wheat planting is underway in the Southern Plains and Oklahoma, northern Texas and parts of Kansas are showing signs of drought. It is still too early for the market to be concerned about the 2022 crop, but perhaps it should be.