News is starting to roll in. Weather forecasts are getting more attention. Private firms are making estimates for planted area. For those on the farm, the thought, care and attention to detail regarding the upcoming crop year have been constant. For those outside of that industry (traders, buyers, etc.), attention has been mostly focused on the demand news. But now that March is here and the USDA's Prospective Plantings report is just a couple of weeks away, the agricultural markets are shifting attention back to the supply side.
Wheat
Wheat markets have been pressured in the last week. The USDA report last week showed very little change for U.S. supplies, and global stocks actually increased on higher output from Argentina and Australia. Weather conditions in the Central Plains of the U.S. remain too dry, but some rain is in the forecast for the end of the month. These factors combined have allowed the market to drop to its lowest point since early February.
Durum
The durum market held steady from a week ago. Prices have not moved much in the last three weeks. With the coming USDA Prospective Plantings Report, the market is not only interested in the corn and soybean (primary headline grabbers for this report) area, but also spring wheat. This includes durum. While private estimates are coming out for overall spring wheat area, durum-specific plantings have not been covered. That being said, most are expecting smaller overall area planted to spring wheat, which would likely result in a drop in durum area as a part of that.
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Canola
The canola market has fallen in sympathy with the broader oils markets. Both soybean and palm oils are at multi-month lows. Pressure is coming from a huge crop in South America, expected recovery in palm oil output in Malaysia and Indonesia, and an expected acreage bump in the U.S. Brazilian harvest is ahead of schedule, and while it is taking longer than usual for the soybeans to make it to port due to excess rains, the large output is pressuring the entire soybean complex. Palm oil data was released from the Malaysian Palm Board. This showed ongoing tightness in stocks and a seasonal dip in production. However, the market expects a good recovery following last year's El Niño dryness. Canola fundamentals on their own point towards support. Demand from the U.S. has been strong and Canadian stocks may tighten further (though the USDA did not change the canola stock situation in its monthly World Agricultural Supply and Demand estimates, last week).
Peas & Lentils
The story for pulses continues to revolve around India. The current exemptions for pulse imports not fumigated with methyl bromide will expire on March 31. No news has come out in the last week suggesting that any exemption will be granted to Canada, and the market tone is that India may be able to meet more of its domestic demand than previously thought. To compound this notion, many market participants believe that India will not grant any extension to duty-free periods for pulse imports. This would see a return of five percent import duties on lentils into India.
Mustard
Slow export pace for Canadian mustard seed continues to be the story. The Canadian Grains Commission showed just 300 metric tons cleared through reporting terminals in the first week of March. Total exports to date total 12,000 metric tons compared to 11,500 metric tons a year ago.
