CRESTWOOD, Ky. - For a variety of reasons, the Thanksgiving holiday week is usually a quiet one for watching agricultural markets, and 2016 was not an exception.
Harvest of most crops is done by now, and crops in Canada and the U.S. were excellent (save some late-season harvest problems in parts of Canada), which simply limits major volatility. Therefore, supplies are basically known and weather changes have less of a direct impact on the market. With the markets closed on Nov. 24 in the U.S., many traders and market participants closed up shop early for the week or were paying less attention.
Wheat
Wheat markets were moving mostly sideways last week. Winter wheat planting in the U.S. is coming to a close, and most of the crop has emerged. Condition ratings were taken down modestly to 58 percent good to excellent, down from 59 percent last week, because of some dryness in the Central Plains.
A return of wet weather in the coming weeks should boost soil moisture reserves heading into winter dormancy. The bigger market driver for wheat will be the total acreage planted rather than crop conditions in the fall.
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Internationally, higher prices resulting from a lack of farmer selling in Russia is putting some pressure on the government to lower its export forecast. The Russian export total has to exceed 2015 to '16 by roughly 5 million metric tons to warrant the higher prices seen lately, but the slow export pace does not suggest this higher export mark will be reached. This should put some pressure on global markets in the coming months.
One potential impact of the lower farmer selling in Russia is a shift of demand away from the Former Soviet Union to Canada, or European countries such as Germany that have available supplies. A firm dollar likely keeps the U.S. from taking too much export business away from some of these other competitors.
In the European Union, the planting of winter crops is mostly done, and even with weather issues in France during the summer, new-crop plantings look good.
Durum
Durum prices ticked higher last week. Quality issues in Canada have resulted in stronger demand for U.S. supplies. The previous week's export sales were unusually large, totaling 88,000 metric tons to an unknown destination.
Huge further upside for durum is not expected in the near-term because of depressed wheat markets, but a premium could build for Minneapolis durum as a result of the issues in Canada's quality.
Canola
The canola market has an interesting relationship to the broader oils markets. Some days the canola market trades independently and is focused on the slow end to harvest. Lately, weather has been favorable for farmers to get in to harvest the last 20 percent of the crop still in the fields.
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But recent snow will likely stick around and mark the end of field access for a while. This leads to a lot of questions: What do supplies look like? How has the quality been impacted by the late rains?
On other days, though, the market takes direction from soybean oil. Market strength for the entire soybean complex on export and crush demand early in the week spilled over to canola, leading to a big rally.
Overall, the large soybean supply in the U.S., coupled with a good start to the South American growing season, is limiting major upside for the canola market.
Peas and lentils
Pea and lentil markets remained firm last week. The total supply situation leaves little to worry about, but the issue is quality and meeting export demand.
Global demand for pulses is strong.
Mustard
Mustard seed production is expected to total 234,000 metric tons from 212,000 hectares, according to the most recent estimates from Statistics Canada. This amount is up from 123,000 metric tons on 140,000 hectares last year.
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Exports are expected to stay about even with 2015 to '16, leading to a huge build in ending stocks from just 5,000 metric tons in 2015 to '16 to 90,000 metric tons.
