Minneapolis wheat prices firming
A look at wheat futures prices for Chicago and Kansas City will show the markets moving basically sideways. No major excitement there. Huge supplies are keeping a lid on the markets, even with lower planted area. So one could assume that Minneapolis wheat futures are on a similar track, right?
Not so fast. The December futures contract has put on over 40 cents in just a few weeks, rising above the high achieved in February. The market is quickly rallying, increasing its premiums over the Chicago and Kansas City contracts. Basis values were already firm for higher-protein wheat supplies, as a lack of heat stress last year led to lower availability of said wheat. That strong demand remains, and there could be some weather issues developing in the Northern Plains that will reduce yields if they persist. These factors are allowing futures to rise in Minneapolis.
Wheat prices (as mentioned earlier) are firmer in Minneapolis, while Chicago and Kansas City are flat. Winter wheat conditions in the U.S. were pegged at just 50 percent good/excellent from 52 percent a week ago (and well below 63 percent a year ago). Spring wheat planting is basically done, with the weekly USDA report showing 96 percent completion. Spring wheat conditions were reported for the first time for 2017 at 62 percent good/excellent versus 79 percent a year ago. The aforementioned weather concerns in the Northern Plains stand to reduce that rating in the coming weeks.
The durum market remains flat. The weather in the Northern Plains that is supporting the Minneapolis wheat market has not influenced the durum market, to date. North Dakota's planting efforts for durum are nearing an end, with 92 percent complete.
Canola prices are on the defensive despite some fundamentally supportive drivers. The pressure on the market is spilling over from the soybean oil market, which has been falling for the last week. Large supplies in South America and the U.S. are outweighing the situation in Canada.
On the supportive side, farmers are still dealing with excess moisture in many fields. This may lead to lower acreage than expected by the market, farmers and Canadian government. Additionally, canola demand is strong. U.S. biodiesel producers increased canola usage to 130 million pounds last month compared to 69 million in the previous month. Canola planting in North Dakota is lagging a year ago at 88 percent, but remains ahead of the five-year pace of 77 percent.
In the U.S., soybean planting is in its final weeks. The USDA reported 67 percent of the crop planted compared to 68 percent for the five-year average. The market continues to be surprised with the speed of planting in the wet conditions that much of the Corn Belt has experienced, this spring.
Peas & Lentils
Pulse prices have been supported, as export demand has been strong in recent weeks. The market is paying attention to planting efforts in two completely different countries, continents and hemispheres: Canada and India.
In Canada, Saskatchewan Agriculture reported 91 percent of all of its crops planted. This is in line with the five-year average. Pulse field work is winding down, with 96 percent of the lentils planted and 95 percent of field peas done. Excess moisture in the north is an issue, while southern areas need some rains.
In India, planted area for pulses is up significantly from a year ago: Green lentil area is rising from 71 thousand hectares to 112 thousand hectares for the monsoon season crop (kharif season).
Agriculture Canada is expecting a significant drop in output for mustard seed in the 2017-18 growing season. Production is expected to reach 150,000 metric tons on 158,000 hectares, compared to 234,000 metric tons on 212,000 hectares last year. This estimate is not based on a survey of farmers, however. Much of the growing season is ahead, so changes can occur.
U.S. barley planting is basically done at 94 percent completion. In the first ratings of the 2017 growing season, the USDA showed 70 percent of the crop rated good/excellent compared to 77 percent last year at this time.