The Good: Friday May 13th seemed to be lucky for the canola market today as the July contract closed up C$29 per tonne to settle at C$1,181 per tonne. The canola meltdown at the end of April seemed to signal that traders were leaving the contract for the greener pastures of the November contract. After trading in range during the past eight trading sessions, canola broke out today to the upside and appears to be destined to test the contract highs next week. The market has finally realized that the planting delays that are driving the wheat market also apply to canola. Although this should be an issue for the November contract, the front month is also gaining support from the planting delays. Alberta reported that eight per cent of the canola crop is planted as of May 10th, and Saskatchewan indicated that canola planting was just beginning in some areas.
The Bad: Diesel prices were essentially unchanged this week, but wholesale prices are expected to rise by three to five cents per litre in the coming week. The main concern is that diesel stocks in the U.S. are hitting 30 year lows as increased exports to Europe and limited domestic refining capacity cause stocks to drop. Consumption is rising as economic activity increases. The rise in diesel fuel prices is certainly adding to inflationary pressures as all goods that are transported rely on diesel fuel. Unfortunately, farmers will also feel the pain of increased diesel prices this spring.
The Ugly: If the picture below looks like that of a hurricane, you would not be mistaken. Although the low pressure system moving through the eastern Prairies has brought high winds they are not high enough to be classed as a hurricane. Sustained winds at 1:00 MDT (2:00 CDT) ranged from 30 to 60 kph with gusts up to 90 kph. This has been another windy spring, which certainly is not welcome, especially in the drought regions in southern Alberta and western Saskatchewan. The high winds are expected to be sustained into tomorrow, before the system moves out of the Prairies and into northern Saskatchewan and Manitoba.