The Good: The USDA report today generated a bunch of bullish data for grains and oilseeds, with canola hitting a new contract highs at C$558.40 per tonne. One of the factors that boosted the oilseed markets was a further tightening of the vegetable oil situation. Global ending stocks dropped below 19 million tonnes in the USDA report, which has pushed the stocks to use ratio to 6.5 per cent. This would be the tightest stocks to use ratio for the major oilseeds since 1978.
The Bad: Wheat markets rallied today with nearby spring wheat futures up seven cents per bushel. This usually would be a candidate for the good category, but Minneapolis futures lagged both corn and winter wheat markets. This has pushed the March spread between Minneapolis and Kansas City back down to eight cents per bushel. In a world that is short of protein, DNS 14.0 per cent protein is still trading at a discount to HRW 11.5 per cent protein. The spread for export wheat is about 10 to 15 cents per bushel in favour of HRW.
The Ugly: COVID-19 cases continue to increase at an alarming rate in the U.S. and Canada with yesterday’s cases in the U.S. above 130,000. The arrival of an effective vaccine is encouraging news, but the time until all the U.S. population can be inoculated will certainly see more deaths and limit economic growth.