This week has seen significant fluctuations in the commodity markets, particularly in wheat and canola prices. Following the U.S. Memorial Day long weekend, wheat prices dropped sharply on Tuesday, falling by $10 to $15 per tonne.
Bruce Burnett, the director of weather and markets with Glacier Farm Media, attributes the wheat market's volatility to several factors. "The USDA's forecasting a new record. Crops in Europe and the Black Sea region are generally healthy, though there are some concerns. There's going to be a lot of heat in Russia, and there was a frost. These types of things happen, but the market seems satisfied that there's enough wheat around, at least over the next little while that's going to be harvested. Add to that some rains in the U.S. Southern plains, which is fairly well timed for filling. So that pushed the winter wheat markets down, and naturally spring wheat."
Wheat prices began to recover on Wednesday after a U.S. report indicated that 45 percent of the spring wheat crop is considered good to excellent, a figure significantly lower than trade expectations.
The canola market also experienced volatility this week. Canola prices climbed by around $12 per tonne on Tuesday, only to drop by approximately $11 per tonne on Wednesday.
Burnett says we've been in a very tight situation for vegetable oils with the tariff threats, adding that whenever the vegetable oil markets globally sell off a bit, then we see canola drop as well.
Looking ahead, Burnett expects canola futures to trade between $710 and $730 per tonne, noting that the market appears reluctant to exceed this range.
To hear Glenda-Lee's conversation with the Director of Weather and Markets with Glacier Farm Media Bruce Burnett click on the link below.