On the ICE Futures Canada platform, canola contracts spiked up to its peak in recent months in the week ending March 9. Although the contract eventually experienced a bit of decline after hikes were announced by the U.S. Department of Agriculture for its estimates for U.S. ending stocks of soybeans.

The agency had fixed the carry-out at about 555 million bushels. When compared to the previous forecast, this was an increase of an approximate 25 million bushels. In the United States alone, exports had also climbed down by more than 30 million, falling close to 2 billion. This has increased the ending stocks situation.

However, it wasn’t all bearish as the USDA dropped down its estimate for Argentina’s soybean crop, pushing it down to about 47 million tonnes. This when still compared against the previous estimate also reflected a decline of over 50 million. Yet this was not necessarily adequate to bring a relief to the fallout owing to the carry-out situation.

Disruption in production owing to weather has been regularly occurring in the United States as well as in Western Canada. Large swathes of Alberta, Manitoba, down to Saskatchewan have been stuffed with snow. These disruptions inspired by weather conditions have caused prices to be fluctuating. Such weather conditions have not been totally helpful as farmers suffered hitches in their sales activities for days especially as transportation is fast becoming a big issue to worry about.

Thus some farmers had to wait for roads to be rid of snow for days, although roads were restored, the break had affected supply, distribution, and prices. Now the situation (pertaining to moisture) in western Canada is reasonably improving in the aftermaths of the precipitation. Prior to the snow falling, a large part of Alberta and Saskatchewan almost had no ground cover.

Aside from this decline triggered by weather as explained, there was also a number of factors that had a contributing hand in the situation. Among such factor is poor export demand. Reports had it that canola carry-out could spike up to as much as 2.5 million tonnes. When compared to what analysts were forecasting as at the end of last year, it exceeded expectations by almost half a million tonnes.

Therefore the dominant May contract finished the week at $514.90 a tonne, about a decline of  $13 lower from the March 2 close. We can not ignore the possibility that traders would rush into the futures market at the very eleventh hour and buy massively, but the immediate reality is one that is cautious. Few are ready to take the big leap at the moment considering the level of uncertainty and surprise-element in the market as at now.

Over in the United States, there has not been much stability for soybeans. More precisely, it has been a pretty volatile week. The front-month (May) contract for some time now has been hovering around US$10.75 although it went on to drop down to US$10.40.

Moving over to corn futures, there has been an uprise in this dimension. Quite very positive in this niche to say. Corn futures have enjoyed substantial gains to put it. This is well connected again to the report released by the US Department of Agriculture. This report in a way had dropped down the estimation for Argentina’s crop. Reports coming from the agency had revealed production slated at  36 million tonnes. This puts it in comparison against the amount of 41 million such recorded for the year 2017. This also pulled down the number for U.S. ending stocks.

All has not been too smooth for Chicago wheat either as it failed to escape the draw too. Also suffering the scourge of the general decline, this contract dipped down under the notable US$5/bu mark in the May contract. Part of the reason behind this decline could be attributed all way to Russian exports which have been increasing for some time now. Also, the growth of US ending stocks has not helped the fate of Chicago wheat either. Weather also has its hand in all this as some rains had fallen on the US Plains although that wouldn’t sufficiently hamper the dryness the region had been experiencing for a while now.