Weather and trade uncertainty are issues in US and Canada
The summer narrative is often focused on weather, which is clearly the case for 2019. Conditions are too dry in Canada and the U.S. Northern Plains. Flooding and delayed planting is proving extremely difficult for many in the Corn Belt and Central Plains. Acreage is unknown for many crops, as flooding is shifting farmers to second and third options. And yield potential goes down for crops like corn and soybeans when planting is extremely late.
On top of the weather uncertainty, there is trade. Both the U.S. and Canada are facing some challenging trade disputes. Canada is not able to sell canola to China due to diplomatic tensions. The U.S. remains in an escalating trade war with China, with increasing tariffs and limited talks between the world's two biggest economies. Now, the U.S. has threatened tariffs on Mexico to force them to deal with immigration into the U.S. This likely will not lead to any long-term trade war, but it does add uncertainty to many markets.
Hard red spring wheat futures remain supported while Kansas City and Chicago futures saw a stall in the rally. Spring wheat areas are too dry, and that has been supportive. But winter wheat conditions remain good (wet, but good), which has slowed price gains.
The U.S. Department of Agriculture showed an increase in winter wheat crop ratings, to 64 percent good/excellent from 61 percent a week ago. Spring wheat conditions were reported as well, with a remarkable 83% of the crop good/excellent.
The Minneapolis durum quote firmed up by a nickel, this week. Obviously, that move is not significant in and of itself, but it is the first time in several weeks that there has been any movement in a market that has been extremely low for more than a year. Saskatchewan has planted 99 percent of its intended durum crop.
The canola market continues its slow march off the lows. Saskatchewan has planted 99% of its intended canola crop. But dryness is a major worry. Only 22% of the topsoil has adequate moisture heading into the growing season. The supportive weather's impact on the market is being dampened by ongoing trade uncertainty with China.
The U.S. barley crop is nearly planted, with 94% completion compared to 87% a week ago. Additionally, Saskatchewan has planted 98% of its intended durum crop.
Mustard seed markets were mixed over the last week as new crop supplies for different classes are beginning to impact price expectations. Oriental mustard seed was firmer, while brown and yellow were basically flat. Planting has been progressing very well given the dry weather in the Prairies; ahead of the normal planting pace.
Pulse planting is Canada is wrapping up. Unlike in the U.S. Corn Belt, conditions have been rather dry, allowing farmers to get fieldwork done at a quick pace. Saskatchewan reported all of its pulse planting completed. Exports of red lentils from Canada are keeping prices firm. According to data from Statistics Canada, shipments through May totaled 73,500 metric tons compared to 63,500 metric tons in April.