Canola contracts on the ICE Futures Canada platform were chopping around for much of the week ended May 26, buffeted by weather issues and downward action in soy.
Wet weather in Alberta and parts of Saskatchewan has created a soggy mess for many producers trying to get onto their fields. Some haven’t started seeding canola yet while others are still trying to harvest last year’s crop. As a result, producers will almost certainly be seeding into June, which was supportive as it raises the chance of frost damage later on. The latest crop report from the province suggests at least five per cent of Saskatchewan’s crop won’t get seeded. That also helped to underpin canola prices.
On the other hand, weather forecasts for the next few weeks suggest drier weather is on the way, which should provide some relief for watered-out areas. It also has created some bearish action for values.
Low commercial stocks of Canadian canola were another factor helping to underpin values. Stocks had fallen below one million tonnes, considered tight for this time of year. That support is tempered, however, by the belief that Canadian farmers are sitting on a significant amount of old crop in search of better prices.
The Canadian dollar continues to improve slightly, which also kept values in check.
U.S. soybeans are in vogue right now as farmers in the U.S. Midwest increasingly switch acres intended for corn into the oilseeds. Excess rain in much of the Midwest has caused many corn farmers to search for alternative crops. On May 10, the dominant July contract touched a nearby high of US$9.89 a bushel but closed at US$9.2650 by May 26.
Corn futures rose during that same time period, but didn’t climb as drastically as one might expect. The corn that was already planted before the rains began in the Midwest emerged rapidly due to the moisture, which pressured prices. July corn closed May 26 at US$3.7425 per bushel, right in the middle of the 20-cent range in which it has traded for the past two months.
Wheat futures on the Chicago Board of Trade Complex and Kansas City Board of Trade have mostly been chopping around the last few weeks, showing few signs of wanting to head lower or higher.
However, wet weather and concerns over the tight supply of high-protein wheat has helped pushed wheat futures on the Minneapolis Grain Exchange higher. The July contract climbed over 12 U.S. cents during the past week alone.