Weather Forecast



Jenny Schlecht/Agweek

Rain, harvest, equities, oil, and USDA updates

A variety of drivers have been in the market's collective conscious that are pushing and pulling prices, this week.

Weather has been disruptive to harvest progress in the U.S. and Canada for the last few weeks. Rain and snow (in more northern areas) are limiting farmers' ability to get in fields and get crops out. In parts of Illinois, standing water in fields will be an issue into next week while snow in parts of the Canadian Prairies are holding canola and pulses hostage.

Also adding to market volatility is the drop in stock values. While a direct line to commodity prices is difficult to draw, one can point out that commodities are often used as a hedge for inflation and a drop in equity markets on the back of an interest rate hike could lead to some added volatility in the months ahead if positive market outlook begins to shift.

Crude oil markets have been lower, this week. While a technical downtrend has not come in place yet, if the price decline continues, look for pressure on some agriculture products. On the flip-side for energy, President Trump announced this week that E15 blended gasoline would be available year-round, delivering on a campaign promise to farmers.

Lastly, the U.S. Department of Agriculture released updated supply and demand estimates, showing large supplies of corn, wheat, and especially soybeans. Heading into mid-October, attention remains on trade relationships with China (for both the U.S. and Canada) and harvest conditions, which are expected to improve in the coming week.


Wheat markets remain range bound. The U.S. Department of Agriculture showed a slight increase in U.S. supplies while global stocks tightened. Lower output from Australia and Russia led to a drop in global stocks of 2.5 million metric tons. Additional concerns are lingering over the market that Russia will curb exports using its quality watch group. On the bearish side, conditions for planting winter wheat in the U.S. are very good with all of the recent rains.


Durum prices are unchanged from a week ago. There has been little to drive prices in the last couple of months, even as harvest came and went. The U.S. Department of Agriculture is holding ending stocks for U.S. durum basically unchanged from a year ago at 36 million bushels.


The canola market briefly pushed above the 500 Canadian dollar resistance point, but a rally could not be sustained. The turn in the soybean oil market pulled canola futures back down. The U.S. Department of Agriculture showed huge supplies of soybeans and the lack of resolution with trade with China continues to be a lag on all fats and oilseed markets. Even though this trade policy could favor additional canola business for Canada, the overall fats pressure cannot be ignored. Weather remains mostly unfavorable for canola harvest to finish up in Canada. Saskatchewan's canola crop is just 52 percent harvested compared to 92 percent a year ago.

Peas and lentils

Lentil exports have been strong to start the new crop year. Data from the Canadian Grains Commission show exports through reporting terminals exceeded a year ago by a huge margin. On the flip-side, pea exports have been off to a slower start.

Mustard seed

Harvest remains slow for the remaining mustard seed crop due to poor weather. However, yield reports suggest that the crop could be bigger than initially forecasted by Statistics Canada, as long as it can get out of the ground. Just 76 percent of the crop was harvested at the start of October compared to 91 percent for the average pace and 98 percent a year ago.


The monthly U.S. Department of Agriculture supply and demand estimates saw a drop in output for the 2018/19 barley crop. Yield fell to 77.4 bushels per acre from 76.3 in the September report. Feed usage was also increased by 5 million bushels. As a result, ending stocks fell to 88 million bushels from last month's 96 million bushel carryout estimate for the 2018-19 crop.