The week started off with a bang as trade news dominated the headlines and sent the loonie soaring. Canola took a hit on Monday, but spent the rest of the week ended Oct. 5 in the green.
A tentative renegotiated North American Free Trade Agreement (NAFTA) deal was reached late Sept. 30. The new trilateral deal will be called the United States-Mexico-Canada Agreement (USMCA) and still needs to be ratified by the three countries.
The day after the deal was announced saw the markets soar. Chicago Board of Trade soybean contracts were on the rise as many speculated that if the U.S. could make a deal with Canada, well, then, maybe it could make a deal with China too.
After months of trade uncertainty wearing on the Canadian dollar, it made gains to break the 78 U.S. cents mark. This weighed on canola and sent the market down. The next day, though, the dollar weakened and canola was able to regain most of its losses.
The rest of the week saw weather take centre stage. Snow started falling in Calgary Oct. 2 and blew its way east over the next day, hitting parts of Saskatchewan and Manitoba. Snowfall records for the start of October were broken and harvest found itself stalled once again.
Producers across Western Canada had a good weekend, with some harvest progress made as Mother Nature turned off the taps and allowed the fields to dry slightly. In Saskatchewan, the canola harvest was 52 per cent complete as of Oct. 1, up from 48 per cent the week before, according to the provincial crop report. Alberta made strides, too, with 20 per cent of its canola harvest complete as of Oct. 1, up four per cent from the previous week, but still well behind normal for this time of year.
The canola market also saw its best volume overall for a week since the market’s move to New York. From Tuesday to Thursday daily volumes were above 23,000. Friday, though, saw a retreat ahead of the Canadian Thanksgiving long weekend, with only 21,434 contracts traded.
The canola market rose steadily over the week, even hitting a six-week high on Oct. 4. The market cracked the $500-per-tonne mark that morning, but closed slightly lower. However, the contract finished the week above the $500-per-tonne mark, at $501 on Oct. 5.
In the U.S., weather was the main influence on the market. Wet weather in the U.S. Midwest has slowed the corn and soybean harvests.
Over the course of the week, soybean markets were on the rise for the most part, as forecasts continued to predict rain. However, there were a few days where the market ended in the red. On Oct. 4 the latest export data from the U.S. Department of Agriculture were mostly in line with traders’ estimates, which weighed on the market.
The corn market saw modest gains over the week. While ethanol production in the U.S. fell, stocks still rose due to low biofuel prices and rising corn costs, according to the latest data from USDA.
Wheat futures in the U.S. made gains over the week, as global production woes continued to make headlines. Drought in Australia was among those, as many talked about reduced production numbers from the country; meanwhile, Russia temporarily suspended operating licences of 30 inland grain-loading ports alleged to be violating phytosanitary rules. The ports were located in two of Russia’s top grain-exporting regions, which had many musing that this was a way for Russia to limit its wheat exports.