The canola market see-sawed during the week ended Oct. 19 with the overall trend being to the downside as farmers were able to get back into the fields and deliveries picked up pace.
From day to day the market would bounce from the red to the green. However, days in the green weren’t regaining the losses from the previous day. Friday, Oct. 19, did break the pattern slightly, with the market regaining the previous day’s losses.
As the forecast turned warmer and drier during the week the long delayed harvest was pushed back into action across Western Canada. Harvest progress began to weigh on the market; however, there are still concerns about the quality of the crop following the wet and cold weather.
Crop reports started to show progress, with the Saskatchewan canola harvest shooting up six percentage points to 67 per cent. Alberta’s crop report pegged the canola harvest at 30 complete, up four percentage points from the previous week. With the news that many farmers were back in the field throughout the week and weekend, it is expected this week’s crop reports will show more progress.
The Canadian dollar also had an effect on the market as it strengthened during the start of the week and then started to falter. However, with the current harvest conditions the loonie’s effect on the market is starting to wane.
The canola market isn’t expected to see a rally for the foreseeable future. It will continue to bounce around trending downward until at least the end of the month. After that a rally could take hold if farmers are able to get enough cash and stop selling until the new year.
Chicago Board of Trade (soybean) contracts were also bouncing around during the week. There was large variability for soybean contracts, on Oct. 15 the November contract gained 24 cents during the day, while on Oct. 18 it dropped 22 cents.
The market was driven by headlines, as uncertainty over where trade negotiations stand between China and the United States affected it. At the end of the week the U.S. Department of Agriculture announced China had cancelled a large sale of U.S. soybeans, another large sale with unknown details was also cancelled.
The CBOT corn market saw a downturn for most of the week as the stalled harvest in the U.S. Midwest was spurred back into action. There is still concern though about the crop condition following the wet and cold weather the area received.
Wheat markets in the U.S. were also trending downwards during the week. USDA exports released on Oct. 18 showed the export pace was slowing and reports surfaced that cheap Russian wheat has been underpinning the market. However, other reports showed that Russia’s wheat production is significantly lower this year, which has many wondering just how long can it continue to export for?