Headlines:

  • Canada’s bread wheat exports set to rise as US faces shortfall
    Canada’s 2017/18 wheat production is marked down from last month by its official analyst, but its export volumes could still be higher than last year’s, despite reports of dry conditions in its prairie states. Agriculture and AgriFood Canada has reduced its wheat production forecast by nearly 1.3 million metric tons from the June figure, in line with a reduced planted area estimate from Statistics Canada. It now predicts a 22.7m tons Canadian wheat crop (excluding durum), down 5% on the 23.96m ton harvested for 2016/17. The fall is largely due to an assumption of trend yields of 3.3 ton/ha after last year’s exceptional 3.68 ton/ha yield. Canada’s wheat exports up 3%? But higher carry-out stocks and a reduced domestic usage – last year’s high volume but poorer quality crop saw more crop diverted from export markets to Canada’s animal feed mills – means exports should be up on 2016/17. The AAFC expects exports to increase by 3% year-on-year to 16.6m tons from 15.6m tons last year, although they will be limited by supply.
  • Butter and cheese help dairy commodity prices stabilize
    The latest Global Dairy Trade (GDT) auction has seen prices stabilize after two successive decreases ended the run of dairy price growth seen since March this year. But Skimmed Milk Powder (SMP) values are not enjoying the same strength of recovery as for butter and cheese. The July 18th auction saw a 0.2% increase in the GDT price index to $3,387/metric ton, following falls of 0.2% on July 4th and 0.4% at the June 20th event. The latest round saw butter values increase by 3.4% to $6,004/ton and cheddar cheese by 1.6% to $4,112/ton. No milk powder was traded at the auction.

 

Summary:

With the weather outlook looking dry once again Corn, Wheat and Beans capitalized on the opportunity to close a bit higher. Corn was up about 6 cents, Beans rallies about 10 cents and Wheat recovered off of intraday lows to post a modest ½ to 1½ cent gain. Most recently, forecasts show that temperatures will remain in the high 90’s to low 100’s in the Western Corn Belt of the country over the next few days. So, the little bit of rain that may hit the region may not be of much help. July and August are critical weather months for the Soybean complex and the current dryness posed risk to the potential crop production. The Wheat trade was a bit mixed today and the price action may be the start of a short-term low from the perspective of a technical chart. Wheat is trading very close to technical support levels and may be entering potential sideways to slightly up consolidative phase over the next few weeks.