Strong demand data ahead of spring plantings
With the U.S. Department of Agriculture reports for quarterly stocks and planting intentions not due out until the end of the month, markets are looking at demand for some direction. This is not to say that current weather and forecasts for the spring are not influencing trade, but to emphasize the usage of many crops still matters as winter comes to a close.
For vegetable oils, the North American Oilseed Processors Association put February crush at 153.7 million bushels. This large crush volume is a record for February and provided support for the soybean complex, even though this translates to more available soybean oil from production (even with low oil yields continuing). Additionally, sales of U.S. corn last week totaled a remarkable 2.505 million metric tons. This is the highest weekly total since September 2008. While export demand to India for pulses and other products continues to be weak, these greater demand factors should not be ignored as the 2018-19 crops will soon come into greater focus.
Minneapolis wheat contracts remain steady despite the strength witnessed in Chicago and Kansas City futures. Conditions are looking good for the spring wheat crops, so the drought-stricken winter wheat crops have not been able to spill over and support Minneapolis. Plus, there was already a good premium built in that has simply eroded.
For the winter wheat crop, conditions have not improved with no signs of rain coming through the end of the month. Longer term forecasts show a less-than-normal chance of precipitation through April as well. Despite this, Chicago and Kansas City futures have lost some steam. The slowing of short covering has taken the market's foot off the gas, but ongoing weather woes will keep support in place.
Durum prices have moved lower. With planting ahead, weather is mostly favorable for growers in key durum producing areas. Forecasts show good precipitation as well. With good supplies heading into the new crop, there is little to rally the market without a weather problem arising.
Canola continues to be a market follower. While demand is good, supplies remain comfortable. Record planted area is also expected in Canada this spring. Soybean and palm oils are trading off the recent lows, though major support is not in place. Malaysian government data on palm oil production was bullish, as stocks fell with declines in output. Despite this, major support did not come for the palm market through the week. For soybean oil, the market is well supplied due to greater than expected crush in the U.S.
Peas and lentils
Pulse markets have been quiet. Demand has not been as strong as hoped for some products due to the import tariffs in India. And even if not directly impacted, many fear that new tariffs will be put in place that will further reduce demand.
Mustard seed news remains light, with Canadian exports tracking just behind a year ago. Shipments between August and January were down a mere 4 percent from the previous marketing year.
There has been a lot of focus on Russia's wheat export efforts during the last year, and for good reason. But barley shipments from Russia have been equally impressive. Through the end of February, Russia has exported 4.034 million metric tons of barley compared to 2.949 million metric tons for the entire 2016-17 crop year.