The Good: We might as well offer a permanent place for canola in “The Good” section as the current rally continued today. This rally has been quite impressive with a parabolic move higher in the third week of August. Since August 20, the November canola contract has rallied C$48.90 per tonne to C$531.90 per tonne. Even more impressive is there have only been three down days in that period. The average daily gain has been modest, which is positive for the sustainability of the market. Eventually this bull run in the oilseed complex will peter out, but it is showing no signs of hitting a top at the moment.
The Bad: U.S. wheat sales were poor this past week (ending on September 10th), with only 337,500 tonnes reported. HRS and HRW sales were low with the bulk of the sales coming from wheat wheat. HRW sales and shipments this crop year are currently at 3.85 million tonnes, which is exactly the same as spring wheat sales. This is a concern as even though the HRW crop was reduced this year, it was still 165 million bushels larger than the HRS crop. HRW is the cheapest U.S. wheat available at export position as was indicated by a bid on the latest Egyptian tender. Unfortunately the freight differential made the bid uncompetitive versus Russian wheat.
The Ugly: As strong as U.S. sales and exports of soybeans have been in the past month, Canadian exports remain in the doldrums. Although the harvest is just getting underway in Western Canada and southern Ontario, exports continue to only flow from Canada at a trickle. For the week ending on September 10th, soybean exports were a whopping 100 tonnes. Soybean exports are down over 200,000 tonnes from last year’s tepid pace. Demand is likely to pick up when new crop becomes generally available, but Canada is certainly off to a slow pace when it comes to soybean exports.