The Good: Canola markets rebounded after yesterday’s slide and the January contract finished up C$5.60 per tonne to close at C$540.50 per tonne. The drop in canola futures yesterday was likely tied to find selling, which seemed to dry up today as the market moved higher. The close today continues to confirm the sideways move of the past week, after the sell off last Wednesday. Fundamentals remain strong for canola with both domestic crush and exports driving the market.
The Bad: Spring wheat futures pulled back today, but remained in the recent trading range. The disappointing part of the market move in spring wheat today was that the winter wheat markets managed to move higher. This moved the March Minneapolis – Kansas City spread to contract lows of 3.0 cents per bushel. This continues to price spring wheat at bargain basement levels compared with the winter wheat contracts. This should continue to spur demand in the coming months as prices will boost both domestic and export sales.
The Ugly: U.S. durum grind during the last quarter dropped to 17.5 million bushels, which is down 10 per cent from the previous quarter. The drop is not unexpected as the summer is typically a slow period for pasta consumption. The good news is that durum mills did increase by 10 per cent from the same period in 2019. This is one of the reasons why U.S. durum demand has been relatively slow so far this growing season.