P&H Western Weekly Recap: October 14
October 22, 2024
Catch up on the latest grain market trends!
Markets anticipate a Bank of Canada rate cut on Wednesday, which could weaken the Canadian dollar and improve the CAD basis on wheat.
Wheat
-Spring wheat futures fell by over 27 cents, with the December contract closing at 615’4. The Western Canada harvest is 99% complete, with Alberta and Saskatchewan yields around 45.7bpa and 46bpa, respectively.
-Funds reduced their net shorts in Minneapolis, Chicago SRW, and Kansas City wheat contracts, while U.S. HRW wheat areas missed key rains. Some rainfall is expected in the next 24 hours.
-Australia’s wheat output is set to rise 18%, while Argentina’s rains aid wheat recovery. The IGC maintained its 24/25 global wheat forecast at 798MMT, balancing improvements in Kazakhstan with declines in Australia and Argentina.
Canola
-Canola Futures & Harvest Progress: Canola futures rose slightly by less than $2/MT to close at $616.20/MT. As of mid-October, harvests were nearly complete, with 98% of canola harvested in Saskatchewan and Manitoba and 92% in Alberta.
-Canola Exports & Domestic Use: Weekly Canadian Grain Commission stats show 384,800 MT of canola exports in week 10, bringing the total to 2.34 MMT, significantly higher than last year’s 872,900 MT. Domestic use (mainly crush) reached 2.24 MMT, also surpassing the previous year’s 1.86 MMT.
-Global Soybean & Oil Production: Brazilian soybean production for 2024/25 is estimated at 166.05 MMT, slightly below USDA’s forecast. Increased global soybean oil and better palm oil production will stabilize prices in the coming months.
Barley/Corn
-Barley harvest in Western Canada is nearly complete (98%+), with Alberta yields at 57.8 bushels per acre and Saskatchewan at 62 bpa. Domestic barley markets are softening, with buyers targeting deferred delivery months due to lower demand from local feedlots, partly driven by expected US corn imports.
-The arrival of up to 2.5 million metric tons (MMT) of US corn into Canada, specifically Alberta, is reducing demand for local grains. Australia’s barley production is projected at 11.37 MMT, up 5% year-over-year, adding to global supply.
-Global corn production remains strong, with the US harvesting 47% of its crop and Brazilian corn planting 42% complete. USDA export sales for corn were robust at 2.26 MMT, driven by a large sale of 1.62 MMT to Mexico.