Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The oilseed markets were supported by the USDA report that saw reductions in South American soybean production of 9.5 million tonnes for the BAPU (Brazil, Argentina, Paraguay and Uruguay) countries that comprise the bulk of the production. MarketsFarm was surprised at the size of the USDA projections, but feels that there will likely be more reductions on the way. The total combined production of the BACU countries is now estimated at 196.6 million tonnes which is still a record for South America. This move by USDA was enough to support soybean and soybean product values. Unfortunately the rally in prices was not enough to drag canola prices higher.

The Bad: Wheat markets moved lower today as wheat ending stocks for the U.S. and the world were increased from the December estimates. U.S. ending stocks were increased by 30 million bushels to 628 million bushels. The main culprit was a reduction in wheat exports and feeding. The world ending stocks estimate was increased by 1.87 million tonnes to 297.95 tonnes. Kansas City futures dropped 13 cents per bushel, while Minneapolis spring wheat exports were off by eight cents per bushel. The combined hard wheat ending stocks (HRS and HRW) were increased by 25 million bushels, but the total (468 million bushels) is still the lowest since the 2013/14 growing season. HRW wheat area estimates from the USDA project an increase in area of only one per cent from last year. This is not the increase that is needed to produce a large HRW crop. Too bad the market doesn’t seem to care!

The Ugly: Nearby March canola had and ugly day with the contract settling at C$1014.70 per tonne, which is the lowest closing price of 2022. today marks the third day in a row of losses, but the drop of C$13.70 per tonne erased all of the gains of last week and then some. There was no real reason for the drop in the futures price other than a drop in the European rapeseed market. ICE canola has been following European rapeseed, for good or for bad, during the past few months. Buried in the USDA report was a decline in the forecast of rapeseed oil ending stocks of 36,000 tonnes. Lower ending stocks seem to be logically contrary to a C$13.70 per tonne drop in canola futures today.