The Good: Ho hum, another day, another contract high for March canola. The nearby March contract closed the day at C$1,035.10 per tonne, which is the fourth consecutive higher close for the contract. Canola export data from the CGC indicates that the high prices have yet to slow the export pace of canola. MarketsFarm estimates that exports will be limited to 4.25 million tonnes this year and exports to date are already 2.94 million tonnes. Exports of canola over the past two weeks were 166,40o tonnes, which is good considering that the holiday break usually slows exports. Canola stocks on January 2nd in Vancouver were 185,700 tonnes, which indicates that exports are not going to slow anytime soon. Thunder Bay also shipped their last canola boat of the season last week (21,500 tonnes), likely destined to Europe. Although exports are down sharply from last year, they need to slow down soon in order to maintain a reasonable level of ending stocks.
The Bad: The dryness in southern South America is not the only concern for the corn and soybean crops in the region. Temperatures have also been above normal across southern Brazil and Argentina. Cooler weather has filtered into this region late this week, with highs mostly in the 28C to 30C range. Unfortunately for farmers in the region, the temperatures are expected to increase over the next week, with highs in moving back to the 35C to 40C range. Not only are the dry conditions causing stress to the crop, but the hot conditions are reducing the amount of moisture that is currently in the soil! No wonder the market continues to add a weather premium into the oilseed complex. A record South American soybean crop is now in doubt.
The Ugly: Winter has certainly arrived in the Prairies and this past week was the coldest of the winter of 2021-22, at least so far this winter. The lowest temperatures over rate past seven days to Thursday morning were below -30C across the Prairies with many lows in the -35C to -40C range. The coldest temperatures were naturally reported in the northern areas of the Prairies with lows below the -40C mark across the northern grain belt from north central Saskatchewan to the Peace River region in Alberta. The good news is that this cold snap appears to be ending by next week, when temperature will swing back to more normal levels.