The Good: ICE canola futures were closed today, but European markets (non UK) were open today. The nearby Matif February rapeseed contract closed the day at 771.25 Euros per tonne. which is just below the contract high set last week. The main driver of the oilseed markets were continuing dry forecasts for southern Brazil and Argentina. This is causing some concerns for the market, despite the fact that the soybean crop in the centre north of Brazil is in very good shape. The drought in Argentina is a concern for the soybean oil market, although traders moved the nearby contracts lower in trade today. Look for ICE canola to get a bid in the overnight session from the outside market movement today.
The Bad: No one likes wheat anymore! Huge crops in South America and a sexy drought in southern South America is moving speculative interest in wheat to soybeans/oilseeds. The market seems to think the the 2022 crop is going to huge around the globe. With a major drought still underway in North America it is hard to believe that the wheat market is a slam dunk lower. The recent rating from USDA indicate that there is still a little issue with the HRW crop (see the Ugly). Crop ratings are likely to support the wheat markets in the overnight session.
The Ugly: The USDA released a portion of their monthly winter wheat condition summary, despite the closing of Washington, DC. The poor dears in the U.S. capital received a dusting of snow that shut things down. Kansas and Oklahoma reported a dramatic drop in crop conditions during the month of December. In Oklahoma, the crop was rated at 48 per cent at the end of November, but dropped to only 20 per cent good to excellent at the end of December. This is the lowest rated crop in Oklahoma at the beginning of January since 2018-19. The main HRW producer, Kansas, dropped from 62 per cent good to excellent at the end of November to 33 per cent on December 31st. This is the lowest HRW crop since the 2013-14 crop year. What yields did HRW achieve in 2013-14 and 2018-19? They were 36.6 and 39.1 bushels per acre, respectively which is significantly below the yields in the past two years.