The Good: Wheat markets were the star of the day and the week for that matter as the nearby December contract closed the day over US$10 per bushel to settle at US$10.13 per bushel. This is the first time that spring wheat has closed above the US$10 per bushel mark since July of 2012. Wheat markets were boosted by yet another contract high posted by the European wheat futures (milling wheat Matif contract) hitting yet another contract high. Wheat values have been rising as demand remains strong and exporters are running out of grain. Australian exporters are reporting that shipping slots for November and December are already booked and January is running out. In other words, if you want to buy Australian wheat, don’t expect delivery until February at the earliest.
The Bad: The U.S. precipitation outlook yesterday showed a typical La Nina weather forecast for the winter period with above normal precipitation in the PNW (and Western Canada for that matter) and below normal precipitation for the Southern Plains in the U.S. This was one of the main reasons that Kansas City futures rallied today as the winter wheat growing areas in Texas and Oklahoma are already very dry during planting and crop establishment. The world needs a large 2022 crop and any hint of dryness will result in an increase in futures values.
The Ugly: Canola futures dropped for the second straight session with the January 22 contract closing the day at C$929.70 per tonne. The good news is that the contract gained C$19.40 per tonne on the week. The bad news is that canola appears to have resumed a pattern of following the soybean oil market, which has also been down in the past two days. Soybean oil closed just above 62 U.S. cents per pound, which is still well below the prices for alternate vegetable oils.