ICE Futures Canada canola contracts held rangebound for most of the week ended May 19, but trended lower overall as larger losses in the Chicago soy complex put some pressure on values.
Crop reports put out by all three Prairie provinces during the week showed a mixed bag when it comes to seeding progress.
Manitoba is furthest along overall, with producers in the central part of the province in the final stages of seeding.
Saskatchewan is in line with the five-year average, at about a third done. However, its northern growing regions are well behind normal and are still dealing with last year’s unharvested fields in many areas as wet weather continues to cause problems.
Alberta is in a situation similar to Saskatchewan’s, with farmers in southern regions making good progress while those in the north are further behind and still dealing with last year’s unharvested crops in some cases.
The attention on new-crop seeding progress is always a key factor at this time of year, but the tightness of old-crop supplies may be heightening the situation this year.
Given the current pace of usage, canola supplies will run out before harvest time. That’s a scenario that won’t actually happen, as the pipeline will never run completely dry, but it means prices have room to move higher to ration some demand.
However, “higher” is relative. Price strength compared to other oilseed markets is a better way to look at it.
U.S. soybeans have seen a few weather issues of their own this planting season, but the seeding pace is in line with average and the general outlook is somewhat bearish as far as beans are concerned.
Soybeans trended lower during the week, with delays seeding corn in some parts of the U.S. Midwest likely to swing some additional acres into soybeans. Large South American crops remain a bearish influence in the background as well.
Corn did post small gains during the week, but remains within a rather narrow range. U.S. farmers made some good seeding progress during the week, but there is still about 15 per cent of the intended corn crop left to go in the ground.
As June approaches, the likelihood of some of that area being seeded to soybeans instead becomes more of a possibility.
For wheat, the story of the week is the widening price spread between Minneapolis spring wheat and Chicago/Kansas City winter wheat contracts.
Snow in Kansas earlier in the growing season has the market concerned over the quality and protein content of the hard red winter wheat crop.
U.S. spring wheat seeding is about on par with average, but the U.S. market is also keeping an eye on Canadian progress, which was keeping some additional support in the futures.