The Good: Wheat prices rallied today for the right reason – improving prices in the international market. The results from the GASC tender yesterday indicated that Russian prices took another leg up from the last tender. The median FOB price was US$242.80 per tonne, which was up by US$7.00 per tonne from the last tender. Russian FOB wheat values are now at considerably higher levels than the past two years. Buyers has been backing away from the increase in Black Sea prices, but have been forced recently to cover their short term needs. The market commentary is that Russian farmers are not selling, but that seems a stretch when prices are at their highest levels in two years. Perhaps the crop is not quite as large as the market currently believes.
The Bad: Canola markets were taken out to the woodshed for the second consecutive day as the nearby November contract dropped C$5.20 per tonne to settle at C$521.20 per tonne. Funds were long canola futures headed into the weekend and momentum is taking the market lower. With 535,000 tonnes of U.S. soybean sales overnight, even Chicago soybean futures were off two to three cents per bushel. The irony is that making the oilseed values cheaper should likely attract bargain hunters that were on the sidelines as the rally unfolded. Let’s hope the buying returns quickly to stem the losses of the past two days.
The Ugly: Ukraine was mostly dry last week and moisture conditions continued to worsen as farmers struggle with planting the 2021 winter wheat crop. There is still time to receive rains as farmers can plant winter wheat until the middle of October, but late planting does make the crop more vulnerable to winter kill. Dry conditions have plagued Ukraine since last year at this time and soil moisture levels are very dry. Not very good conditions for planting and establishing the wheat crop.