Note: The Good, Bad & Ugly will be issue as my schedule allows over the next couple of weeks as I’m out trying to help with the 2020 harvest.
The Good: Canola is the obvious choice today as nearby futures moved up C$5.90 per tonne to C$523.30. This is the highest nearby canola futures price since June 2018. This marks the final step in closing the decline in canola prices that started in 2018. There are a number of bullish factors that are pushing canola prices higher, but the main driver has definitely been the soybean oil markets. Soybean oil futures are still below the recent high of 36 cents per pound that was set in January. There is still plenty of room for soybean oil to move higher, which means that canola still has some room to move higher in the coming weeks.
The Bad: Soybean conditions dropped another two per cent to 63 per cent good to excellent this week. This continues the five week decline in crop conditions. Iowa conditions stabilized this week which helped keep the crop conditions from dropping further. Soybean yields have been reduced by the persistent drought in the western Corn Belt, but USDA yields are still at the same levels as the 2016-17 crop which yielded a record of 51.9 bushels per acre. Note that the conditions in 2016 were 73 per cent good to excellent at this point in the growing season.
The Ugly: Hurricane Sally is about to pound the Louisiana coast tomorrow morning/afternoon with New Orleans directly in the path of the current track. Sally is expected to hit only level two wind velocities, but the system will disrupt the port activities for the remainder of the week. The Mississippi delta region exported 1.38 million tonnes of wheat, corn and soybeans last week, so a five day disruption would certainly hurt this current weeks exports.