| | US crops | Canadian crops
US Crops
Corn futures moved up this week amid concerns of “getting this years crop in the ground”. Planting progress is only at 25% complete, down from the typical 59% at this time of the year. If corn becomes a “ration crop”, analysts are wondering “at what price???” Talk is in the $6.50 to $8.00/bu range. New crop corn (Dec) rallied close the week at $6.295/bu, up 23¢/bu.
Soybean futures are feeling the crunch from the corn market, losing 32.5 ¢/bu on old crop, but only 3.5 ¢/bu new crop. After trading lower for most of the week, soybeans bounced back Friday gaining over 33 and 25 ¢/bu on old crop and new crop respectively. Solid weekending gains in crude oil and gold prices supported the bean market. The market also ignored the rise in the US dollar index, which reached it’s highest point since early March. The Argentine farmers strike is continuing to be a big unknown in the marketplace.
Oats futures rallied upward to over $4/bu for old crop (up 21 ¢/bu to close at $4.01) and to $4.37/bu new crop (up 31¢/bu for the week). This new crop premium is a strong indication that a shortage of oats is expected, and more acres are being sought.
After falling lower during the week, Minneapolis spring wheat rallied to close up higher for the week. Analyst were concerned that the wheat market was oversold, and as the week ended, there were weather concerns regarding the US winter wheat crop area, which was vulnerable to possible frosts this upcoming weekend. As well, US spring wheat seeding is 6% behind schedule. However, this price bounce was despite rumors that India’s wheat harvest (first major world wheat harvest of the year) got off to a good start. World wheat production is expected to increase, while harvest is just around the corner for China and the EU (< month away).
Here are some of the futures price changes over the week:
July soybeans down 32.5 cents to close at $13.04.5/bushel
Nov soybeans down 3.5 cents to close at $12.185/bushel
July soybean oil down 2.39 cents to close at 59.65 cents/pound
July corn up 24.75 cents to close at $6.02/bushel
Dec corn up 22.75 cents to close at $6.295/bushel
July Minn. wheat up 12 cents to close at $9.57/bushel
Dec. Minn. Wheat up 2 cents to close at $9.02/bushel
July oats up 21 cents to close at $4.01/bu32.5
Dec oats up 21 to close at $4.37/bu
Canadian Crops
Old crop canola futures lost $8.90/MT for the week, but it was lower until a $8.20/MT recovery on Friday (July closing @ $603.80/MT). New crop canola, also pressured by expectations of more 2008 seeded acres than indicated in the StatsCan Seeding Intentions Report, lost $8.40/MT for the week. It too, gained back over $8.00/MT on Fridays’ trades. There was only light trading for the week, but it’s what happening in the field that has put pressure on canola. Company inventories are high right now, with over 100,000 MT above year ago levels, and plenty of inventory in Vancouver with few ships arriving. No new export business has been reported, and canola harvest has begun in China. China reportedly has said that the February freeze did not harm their winter canola crop as first expected……… but this is China talking!
Don’t expect canola basis levels to strengthen over the seeding period with plenty of canola already pre-bought by companies or in storage. Also of note, this year’s canola crush by domestic crushers has used up 16.6% more canola than at this time period last year.
Despite the strengthening of the corn market, local barley futures lost ground for the week. Barley futures lost $2.40/MT for the week (old crop) but new crop remained unchanged from a week ago, closing at $2.61/MT. A lack of demand by end users is pressuring local feed prices, however local cash bids remain relatively unchanged.
May 2, 2008, David Wong (Grande Prairie, AB. 780 538-5289) |
|