The Good: Canola is brushing up against contract highs as a strong move in the soybean oil market (and palm oil) and soybeans pushed the canola market back to the C$550.40 per tonne level in the January contract. Soybean oil was higher because of strong Asian palm oil markets and a 33,000 tonne sale to India overnight. This is the first sale of soybean oil to India since 2017 and the largest purchase since the 2013 crop year. This illustrates the strong demand for vegetable oil that has been caused by dropping stocks over the past number of years.
The Bad: U.S. spring wheat sales were only 163,408 tonnes this past week, despite being the cheapest bread wheat available in the U.S. for both domestic and export markets. Despite the rally in spring wheat, the spread to Chicago December futures remains at 48.2 cents per bushel. The range of the spread remains at a 45 to 65 cent discount which has been the trading range since October. This spread is keeping the spring wheat export values at bargain basement levels.
The Ugly: Pea exports this past week dropped to 1,000 tonnes, which brings an end to the brisk pea export pace of the past two months. Total pea exports are still 268,000 tonnes ahead of last year at this time and given that the trade still has stocks in Vancouver, this will likely be only a temporary blip in the 2020-21 per export program.