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Weekly Futures Tracker

2023 Report Schedule – Important Dates – Click Here For Report Release Schedule

Market Overview

Planting progress is ramping up across the Canadian prairies.
- Producers busy putting the seed in the ground in most regions of the prairies. Some small pockets still need a day or two to get fired up
- Soil moisture ranges from one end of the scale to the other in the prairies but is leaning to the Dry side in most areas. Updated Canadian soil moisture map has lots of producers in need of a soaking spring rain to get the crop off to the races. The soil moisture map puts in a comparison to last year at a similar time.
- Some rain is in the forecast for the upcoming weekend, most intense rains will take place in Southern Saskatchewan and in a very small pocket. Refer to the precipitation forecast below.
Notable events to watch for in the coming week.
- USDA WASDE Report released Friday May 12th.
- Turkish Elections take place Sunday. Current government trailing in the polls. Current government has been in place for 20 years. If no leader takes a clear 50% of the vote, the election will be extended two weeks.
- Russia and Ukraine Grain Deal is set to expire May 18th. Next Thursday. No deal has been made yet and the prior two were agreed to at the last minute. Turkey has acted as a bartering partner in these grain deals so far.
- May 15th to 18th there will be a Kansas Winter Wheat tour taking place, watch this one closely as we get a look at how the crop is performing.
Oklahoma recently wrapped up their winter wheat tour. 24.6 bushels per acre was the average estimate. Second lowest production in the states history.
Market news mostly focused on US and Canadian planting pace, with a side of Russian and Ukrainian news.
- Canadian planting underway, US Corn and Soybean planting forging ahead with very few issues other than some drying conditions in certain regions. US has been ahead of pace with the exception of some delayed spring wheat planting. Expected to catch up here shortly.
- US spring wheat area set for some healthy rains over the weekend although, which should help improve soil moisture issues in the region.
- Black Sea grain corridor set to renew May 18th unless objections made. Russia is saying it needs amendments to the deal.
Canadian grain stocks released this week, on Tuesday.
- Chart below. Grain stocks are mostly higher than last year due to the massive drought of 2021.
- Take a look at the change from 2021 to 2023.
- Oat stocks very high, same goes for flax. Lentils, Canary and Durum take a dip.
Local Markets:
- $17.50 canola achievable in many spots.
- Some improvement in wheat bids. Some $10.50 to $11.00 bids old crop available depending upon region.
- Other crop bids not showing much movement for the week.
  - Feed barley bids fell. $6 new crop $7 old crop
  - Red Lentils old crop in the $0.36 area
  - Canary Seed bids $0.39 region
  - Flax having a tough time breaking above $16.00.
  - Oat specials at $3.50 to $3.75 northern prairies. Some $4.00 southern prairies.

May 9th Report Release Date

Prime Rate History – Chartered Banks Canada

Canola 6 Month Chart –

50 Day Moving Average – 100 Day Moving Average (Yellow) – 18 Day Moving Average (Red)

CANOLA CASH BIDS – CENTRAL PRAIRIES

Spring Wheat 6 Month Chart

50 Day Moving Average – 100 Day Moving Average (Yellow) – 18 Day Moving Average (Red)

Spring Wheat Cash Bids – Central Prairies

Spring Wheat

$8.44/Bushel – Up $0.08 USD / Bushel Past Five Trading Days

Canadian wheat bids pick up very small ground week over week.
- Sitting $9.50 to $10.00 for new crop
- Old crop trading range pretty wide depending upon region. Closer to mills paying $11.00
  - Inland facilities triggering $10.50 this week.
- Wide swath of bids and basis levels vary significantly based upon region.
- US Spring wheat is facing delayed planting, but expect that to catch up
- US winter wheat conditions remain very poor, see chart below. Near record poor conditions.
Spring wheat is going in the ground in western Canada. Early crops being planted in most regions of the prairies.
Massive amounts of spring wheat being planted in western Canada this spring.
Russia has been trying to ruffle feathers saying they are leaving the grain export deal in May
- Russian scare tactics have been having limited affects on the price of wheat as of late.
- Russia has lots of wheat to sell and they have been selling it very cheap $275 to $300 USD per tonne
We will get a US winter wheat tour from the Kansas Wheat will take place from May 15th to 18th.
Canadian wheat not pricing itself well into global markets as we are more expensive than Russian wheat, which is nothing new, even prior to war times.
- Canadian wheat sells itself based off of quality. Russian wheat is typically of lower quality but producers have an abundance of the crop. It is sometimes hard to compare FOB bids as wheat comes with so many different characteristics.
- According to the USDA, Global Wheat Stock to Usage will come in tighter for 2022 crop year
  - Russia produced a massive record sized wheat crop of over 100mmt, upwards of 20mmt above average.
    - Russia’s main concern is shipping this crop out, despite the games they try to play with the grain export corridor.
  - Global demand is always a underlying tone in markets for overall commodity demand.
    - How much consumption will actually take place?
    - China is expected to be overtaken by India in terms of total population by the end of 2023 at the latest.
  - Ukraine winter wheat planting fell by 40% as well due to major issues with planting a crop during war.
- Updated Latest Winter What Conditions – United States

SPECIAL CROP

Yellow pea prices have fell by about 10% since Stats Canada survey took place, while green pea prices are up about 15%.
China imported 163,000 tonnes of peas in March, mostly from Canada but from Australia and Russia as well
Durum prices in Italy appear to be stabilizing after sharp drop. Prices down to about July 2021 levels. $387 per tonne down from $571 per tonne one year ago.
Special crops take the rear seat in the upcoming planting campaign as more producers allocate more acres towards Canola, Spring Wheat, and Barley.
- Lentil, Oats, Flax and Sunflowers all significantly lower
- Pea acres coming in at just 3.2 million acres. 150,000 acres below last year but down nearly 1 million acres from 2019 and 2020 when roughly 4.3 million acres were planted.
USDA predicting a 9% increase in pea plantings.
Australia increased their pea crop to 341,000 tonnes, up 20% year over year.
Analysts expecting lower Flax and Oat acreage for spring of 2023 due to new crop pricing opportunities.
Ukraine could plant more peas due to lower costs of production and less access to operating capital. Still expected to be half of pre war acreage although
Canada remains globes cheapest source of oats right now
Canadian producers can not compete with Kazakh or Russian flax in the global marketplace. Canadian flax hovering $16 per bushel range. Will have a tough time making upwards momentum if other main supplier keep market well supplied.
Russia becomes the worlds largest pea producer, taking away the title from Canada
US mustard crop expected to have came in much larger than last year, reducing import requirements. Mustard prices have fell by about 40% since early 2023.
EU imports of Canadian mustard lower for the crop year. Higher volumes coming from Russia and Ukraine.
The combination of Australian and Canadian red lentil crop size will be third largest on record.
Flax prices into Euro regions remain subdued and limiting Canadian crop markets

CANOLA

$725.80 / Metric Tonne – Down $9.30 / Tonne – Past 5 Trading Days

Canola up 200,000 acres for the upcoming crop year.

Ag Canada forecasting 9.5 mmt old crop (2022/23) crush for the year. March numbers released and hit a marketing year high. 923,000 tonnes crushed.

It is expected that at least some of the new crush demand being built in western Canada will be online to take part of the 2023/24 canola crop, although it remains exactly unclear how much will be available. Even an extra few hundred thousand tonnes of capacity at sometime during the year will take off some of the burden of finding an export market for the unprocessed commodity

Planting getting underway in western Canada and it appears the crop will get in on schedule for the most part. Many regions will be looking for moisture right away if none is in the forecast. Some canola is in the ground but the majority will be planted in the next 10 days. Dryness is the number once concern for most producers planting canola as many will be setting drills deeper to touch moisture.

Carryout domestically will be tight but many crushers have a good portion of their forward needs covered off for the time being. That places Canadian canola trying to compete into the global market where bids are lower. Canola markets would be soon expected to turn focus to domestic new crop. Plenty of production risk is at play for the year ahead, as there is every year.

Total usage of Canola in Canada for domestic usage and exports, although higher than last year, is much lower than the past five years. (See Chart Below) Lower carry in stocks is part to do with the lower consumption as no new crop was available until early September.

Board crush margins are very good. Over $200 per tonne in some instances as prices for incoming product devalue while meal and oil share remain strong. Crush margins at the same time last year were hovering around $100 per tonne. Now this all is just a proxy analysis as we truly can not gauge what a crushers back end sales levels may be.

We also need to understand that crush is filling up. Crushers are getting their short term needs taken care of and many line companies have become the main buyer of canola in recent weeks. Export bids are naturally lower than crush bids as export values onto the global market are significantly lower.

Very important to understand where you sit on your marketing plan and when you want to move your crop.

CANADIAN DOLLAR

United States Federal Reserve raised interest rates another 0.25% May 3, 2023. Rates now sit at the highest level in 16 years.

March Inflation came in at 4.3% down from 5.2% February. Down from 5.9% in January and 6.3% December. Central banks are having a tough time using their tools to wrangle inflation down to target levels of 2% but appears to be on the corrective path. May 16th is the next Canadian release date for inflation figures.

Energy prices dropped for March, but expected to be up in April. Energy is a big part of the basket of goods used to determine inflation

Mortgage inflation costs are the big line item of the report. Mortgage interest costs are up 26.4% year over year.

Food prices up 9.4% year over year

Bank of Canada left its overnight borrowing rate untouched April 12th. Next CPI Numbers May 16th Next rate decision is June 7th.

Prime rate at most national banks sit near 6.7% now.

Weather – WPC 5-7 Days Forecast

Canadian Soil Moisture – Year over Year

2023

2022

PRICES ARE IN UNITED STATES DOLLARS. PRICES ARE ALSO FOB US GULF COAST FOR BOTH PHOSPHATE AND UREA. SO NEED TO FACTOR IN THE FOLLOWING: CURRENCY, FREIGHT, MARGIN

It is also important to note that these are not highly liquid markets(Fertilizer). They are meant to provide a price direction indication rather than a firm price. Need to factor in the above variables.