Glacier FarmMedia COVID-19 & the Farm

Experts

 

The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: It was a rough day in the canola markets, but it is good to remember the global canola situation remains extremely tight. The projected ending stocks at the end of the crop year for canola dropped by 1.4 days to 27.2 days of use. The canola stocks are projected to be the tightest since the 2008-09 crop year. This came despite an increase in global production as the Australian production increase more than offset the decline in Canadian production. The canola situation will remain impossibly tight until the northern hemisphere production begins to be harvested in August and September of next year.

 

The Bad: The oat market finally closed higher today, but the 8.75 cent per bushel increase wasn’t enough to make a dent in the down trend that has lasted for the previous four trading sessions. The nearby oat contract settled at US$7.15 per bushel, which is down by nearly 55 cents from the highs set in late November. The tight stocks situation will keep Canadian cash markets well supported, but the rally in the futures appears to be taking a breather as we head into 2022.


The Ugly: Canola futures were lower today, but the leader to the downside in the vegetable oil complex was soybean oil. which dropped by more than one per cent during the session. March soybean oil futures has dropped during the past six trading sessions, and appears to want to test the recent lows set in June. The USDA report did increase soybean oil ending stocks, but the global stocks remain the tightest since the 1976-77 crop year. The fundamentals don’t seem to matter in the soybean oil market as traders look to push the market lower. The biggest change in the soybean oil balance table was a 400,000 tonne drop in Indian domestic use which increased the stocks to use ratio by 1.8 days. When you are dealing with the tightest stocks in 45 years, that doesn’t seem to be a dramatic shift.