Market Report: April 17, 2024

Canola: Currently ICE Canola July futures are trading around $631/MT which is a bit of a decrease from their high a few weeks ago where they were trading close to $660/MT. Will this market at least continue to trend sideways, most likely, but will it have the support to eventually break through the $660/MT resistance level is anybody’s guess. A couple issues that continue to impact this market is the abundance of canola still in the bins, China remains slow with their purchases, and other export buyers haven’t been as active compared to other years.  

 Wheat: Canadian wheat is being exported at a rate that continues to be the highest its been compared to this time last year and the previous four years. Currently, roughly 14.77 million tonnes of wheat have been exported and if this trend continues, there is a good chance that wheat exports during 2023-2024 will set a new record.   

 International: According to the Ukrainian Ag Ministry, they are forecasting grain production to decrease to 52 MMT this upcoming year which is a 6 MMT or 10.3% decrease compared to last year. They have also forecasted the production of 27 MMT of corn, 19 MMT of wheat, 5.2 MMT of soybeans, 5 MMT of barley, and 4 MMT of canola. 

 According to the USDA, 1.33 MMT of corn was exported last week which brings the year to date exports total to ~28.7 MMT which is an increase of 33.74% compared to last year during this same period. High export demand and ethanol use continue to be strong driving factors within this market. 

 Weather: World Weather Inc. predicts that a lot of the United States and a good amount of the Canadian Prairies will face some level of drought this summer. Their prediction is established from an 18-year lunar cycle analysis in which their company president Drew Lerner discussed how he “looked at six analog years [2006, 1988, 1970, 1952, 1934, 1916] and all six of them have a drier and warmer bias for the US Plains, the southeast parts of Canada’s Prairies and the western Corn Belt.” 

 The Australian weather bureau discussed recently that they believe El Nino has ended but are still unsure in regards to the formation of La Nina occurring later this year. El Nino generally brings hotter, drier weather to eastern Australia and Southeast Asia and wetter conditions to the Americas, while a La Nina has the opposite effect. 

 It is important to note with all this drought discussion that we must remind ourselves of what happened last year. The belief was yields were going to be extremely poor but on the contrary the stats showed as a whole, farmers produced a lot more than what everybody thought; even with the lack of rainfall last year! 

 Sellers Tip: Buyers are already filling up June/July contracts and before we know it August will quickly get filled and then the next discussion will be off combine movement. The months seem to be flying by this year. In order to maximize the revenue opportunity and manage market risk for your grain, consider posting up some targets here for the spring/summer. It’s better to be early to the party than miss the party all together!