Glacier FarmMedia COVID-19 & the Farm

Wittal: Seeding progress drags on canola

Our online grain markets columnist Brian Wittal welcomes feedback and information on market conditions in your area, such as current offering prices, basis levels, trucking premiums and special crops contracts. Contact Brian today.

May 11 –– Good weather allowed seeding to progress rather quickly throughout the majority of the U.S. growing region over the weekend. This caused markets to drift lower overnight and throughout the day as traders decided to stand at the sidelines ahead of the weekly progress report that’s due out later this afternoon and the U.S. Department of Agriculture’s supply and demand report, due out tomorrow morning.

The USDA report will be watched very closely as bean stocks in the U.S. and Argentina are expected to drop again, which will help to further support bean futures going forward. Corn is expected to come in slightly above the April numbers, which won’t help futures markets any, and wheat is expected to stay the same as last month, showing adequate supplies available.

Canola seeding in Western Canada also progressed nicely this past weekend and this set the negative tone for the markets in the overnight trade and into today.

Canola is seen as being overpriced compared to other oil products after last week’s hard run-up by the Canadian dollar, so that also pressured canola futures lower today. The drop in the dollar helped to keep the futures from falling very far at all.

Progress report

The USDA crop progress report shows corn at 48 per cent planted, which is 23 per cent behind the five-year average of 71 per cent. Beans are at 14 per cent planted, which is 11 per cent below the five-year average of 25 per cent, and spring wheat is at 35 per cent seeded compared to the five-year average of 78 per cent.

The report overall is considered to be bullish. The key is that if further delays happen with corn planting, then acres could shift to beans and that will definitely start to negatively impact the bean futures.

There are forecasts calling for showers later in the week for some parts of the Midwest and northern Plains regions, so depending on the amount that is received it could inspire wheat markets to rally once again.

The Dow Jones closed down 155 points today, while the U.S. dollar finished up a quarter of a cent. The Canadian dollar was down 0.72 cents today to close at US86.15 cents.

Crude oil finished down 13 cents, closing at US$58.50 per barrel for the day.

Corn finished even to up one cent per bushel today; beans finished up two to five cents per bushel today; and wheat finished down two cents to up three cents per bushel today.

Canola is even to down $2.30 per tonne for the day and barley is down $2.70 per tonne, closing at $142.30.

That’s all for today. — Brian

— Brian Wittal has spent over 27 years in the grain industry, including as an elevator manager and producer services representative for Alberta Wheat Pool, a regional sales manager for AgPro Grain and farm business representative for the Canadian Wheat Board, where he helped design some of the new pricing programs. He also operates his own company providing marketing and risk management advice for Prairie grain producers. Brian’s daily commentaries focus on how domestic and world market conditions affect you directly as grain producers.

COPA Medallion COPA finalist in 2012, 2014 and 2015.
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