Wheat conditions COLLAPSE ahead of a busy week of data for farmers.

Added: 2026-05-12

[00:00:00]Good afternoon and welcome to Canadian egg markets. My name is Brian. Today is May 11th. If you're not subscribed to the channel, we do so. We talk about Canadian grain markets every single day.

[00:00:10]Except sometimes we take Friday off. So, if you're into Canadian egg markets, Canadian grain markets, give us a a subscribe. We really appreciate your uh support. All right, let's get into what happened in markets today. We saw canola down $9.90 to 743.20.

[00:00:25]Minneapolis wheat was up 8 and 1/2 today to 687. Kansas wheat was up 10 and a quarter Sorry, 10 and a half today at 686 and a quarter. Chicago wheat up 15 to 634. Soybeans up a nickel to 1213.

[00:00:39]Corn uh was up four 4 cents today, 475 and a quarter. Bean oil was down 58 points to 73.74.

[00:00:49]Canadian dollar hung in there, five five points up, 73.17. Crude oil up $3.40 today, 95.19.

[00:00:57]Live cattle lost 55 points today to 243.55. Feeder cattle down 208 to 360.15.

[00:01:05]We thought we'd also talk about new crop now that we're rounding the corner into uh you know, more robust discussions about new crop. Um we've got uh there's lots of carries in the market here, too, which I think is worth noting. We've got canola at 751.

[00:01:19]30. Minneapolis wheat at 728. Kansas wheat 712 and 3 quarter. So, those two hard wheat markets are above seven bucks. Chicago wheat is still a little bit lower at 670, but still caught, you know, 15 cents in gains today. Soybeans are 11.94 and 3 quarter or uh five and a quarter up today. Corn 497 and 3 quarter. So, still very close to five bucks on the new crop corn. All right, just kind of wanted to review the egg in drought from uh last week Thursday. It suggested here that winter wheat conditions may gain uh as the um the drought uh the total area covered in drought was lowered or was sorry, it was raised by one percentage point to 70%.

[00:02:03]Um, but that's not a huge, you know, not a huge change. Durum wheat changed from 12% good to excellent to 25%. So, some good some good gains there. Spring wheat was considered left left the same spring wheat areas there. But let's see what happened in the winter wheat crop condition ratings. At this point, we are only 30 minutes hot off the press from when these were released.

[00:02:25]For all winter wheat crop, we saw a three percentage point decline from 31% good to excellent last week to 28% good to excellent this week. That pushes it below the five-year low and so we're in new low territory as far as the as the winter wheat crop conditions. And that's in the last five years. So, you know, pretty concerning here.

[00:02:48]I would say this drop is larger than what the Ag and Drought report would have suggested. So, we may see some support in the in the winter wheat crop as a result of this. We also saw a big decline in the Kansas winter wheat crop conditions from 22% down to 17.

[00:03:06]Now, that doesn't make a new low in the Kansas wheat crop, but where you probably see some of that is in Oklahoma which saw some big declines, Texas, and Nebraska.

[00:03:17]You know, they there was a crop tour that went through Oklahoma that did not show very good results for the winter wheat crop there.

[00:03:25]Today was the start of the Kansas crop tour as well. That'll go till Wednesday.

[00:03:30]We'll probably see some numbers as we get towards the end of the day. Uh, but of course that crop is not the only that crop tour is not the only thing happening. We've got a USDA WASDE tomorrow. Um, it'll be one of the bigger reports of the year kind of marking, you know, the USDA's first S&D for the 26-27 crop year. So, I always look forward to this one. While old crop revisions are are expected, the I think the spotlight here will be on the new crop production targets and the USDA's initial assumptions for the 2026-27 crop. US ending stocks are expected to fall in um 2026-27 for for corn, uh you know, versus the current 2025 ending stocks at over 2 billion bushels, the corn ending stocks are expected to be uh one less than that, 1.9 coming into the 26 crop year.

[00:04:24]Um wheat, year-over-year, is expected to fall by 100 uh 100 million from uh 938 to 833 here, and beans are called a little bit higher, actually. So, uh world ending stocks uh 289 for corn, 126 for soybeans, 280 for wheat. That's pretty high wheat number. So, there is uh some I suggest in there. I think that world production for wheat is going to go uh higher. Uh we did look at kind of the DTN's estimates on where the USDA was going to come from. Though, their kind of assessment is that the US corn production um is called at 15.9 bushels, which is uh 15.9 billion bushels, which is 1.1 billion below that of last year. Soybean production is expected to rise by 200 million bushels.

[00:05:12]Uh you know, wheat production is expected to drop a little as well from 1.985 to 1.73.

[00:05:18]So, there is some you know, uh I think I think we kind of knew directionally where this was going to go because of the lower corn acres, the higher bean acres, and uh lower wheat acres.

[00:05:30]But, uh I don't think this report is really going to factor in changes made uh as a result of the Iran war or changes to the uh to the fertilizer pricing schemes. I think they're going to use the acres from the March intentions as well, I have read. So, uh you know, there might be an element here that the trade has already made up their mind on some of these elements and and it may it may not result in a lot of volatility as a result, but it also has the opportunity to definitely add some volatility here. Soybean seems to have make back made back most of the losses here in the last couple of days.

[00:06:09]It still is now trading back above that channel. It we still have a pretty short-term or a nice little a nice little rally happening here or a uptrend that's happening here that kind of started in the beginning of April and it's been kind of making higher lows and higher highs as we go.

[00:06:27]Of course, there is some uh there is some positivity around the meeting that is also set for this week where, you know, China and the US will hold their first face-to-face meeting in more than 6 months as they try to kind of stabilize the ties uh you know, between there's a lot of things going on here. There's trade, there's the war with Iran, there's a discussion about Taiwan, um you know, there there is discussion about so you know, soybeans and agriculture, which I don't know how prominent that will be in these discussions.

[00:07:00]You know, the the US and China are expected to agree to some forums to kind of facilitate mutual trade and investment while China is expected to announce purchases related to particular airplanes and agriculture products is what we pulled out of some of the media.

[00:07:16]So, I'm hoping that the talks uh are going to include soybeans, but I would understand also if they didn't. There's a lot bigger fish in the ocean to fry up there for China and the US.

[00:07:30]Again, new crop soybeans are making new highs again just settling under 12 bucks, but it did make a new high and test 12 bucks today. So, that's some that's positive that's positive. We can also see that there's a longer term trend line for November soybeans on the on the March upward and we have been seeing higher lows and higher highs as well. That's positive factor for for for beans in the new crop.

[00:07:57]Tomorrow again the USDA is you know tasked with balancing corn exports which have been you know record record fast good pace of exports but the ethanol demand has been poor.

[00:08:09]And kind of two opposing forces could largely offset each other in in this 2025-2026 balance sheet. So in other words we could see upward revisions to the 2025-2026 exports in the WASDE but a reduction of the ethanol use or corn used in ethanol production. So we'll have to see how that plays out. Another factor here in the corn market is the massive long position that traders have in this market. 344.6 thousand contracts long at as of Tuesday of last week. We have we did see a pullback after that so it's possible that has been reduced and some risk has been taken off the table but long positions generally work as a contrary as a contrary indicator kind of signaling that you know there may be a lot of exhaustion in the buy side of the trade and that can create some potential for downside. We'll have to see what the USDA report says though if we are still anywhere remotely long this market you know the traders are obviously optimistic that something good will come out of the out of the corn market.

[00:09:15]Here's July Chicago wheat. Again we've kind of seen now some higher highs and higher lows in this market. We did see a rebound today. Still lots of room to go before we make up for the losses that we saw over the last week and a half or so but we've caught two days worth of we've caught two days bid here. We're back above the 20-day moving average. It did produce a higher low so if we can see some follow through on this rally, I think that would be that would be good to see.

[00:09:43]Kansas wheat also testing the 20-day moving average and kind of almost testing the support that had come in over the last few months in the form of the March the March highs. So, that's acting as support now around the 660 level on the nearby and the 20-day moving average seems to be adding some support there as well. Kansas wheat is also extremely long for obvious reasons. I think the the crop condition ratings and the fears and risks around crop failure in the HRW areas is causing traders, you know, they definitely don't want to be short short that market.

[00:10:17]Minneapolis wheat as well or sorry, this is still Kansas wheat. This is still Kansas wheat. We are looking at a longer-term perspective and you can see just how how fast that long position um took how short it took to get to that long position. It's not a record long by any stretch, but um that that's still is a very large long and does create that opportunity for sell-off.

[00:10:43]Let's move to canola here now. This is the July canola. We are seeing a test of support here on the 20-day moving average. It did make um new highs right at the end of April has failed to kind of move past that yet.

[00:10:56]We saw some gains on Friday. Those gains got taken away today. We're still kind of trending in a short-term upward. So, I have to see where that goes.

[00:11:06]Again, November canola still strong still staying above the 20-day moving average made a high not that long ago as well. So, so far this is continuing to trend higher even amid you know, big stocks you know, large acre increases. So, I think you know, we can't discount the fact that this is trading along with soybean oil as well and you know, that you see it's seen four days now of some lower trade but not aggressively lower trade. So, uh you know, last week we saw a new high in this market as well.

[00:11:37]So, it's hard to it's hard to call this dead. It doesn't look dead yet.

[00:11:42]As far as canola crush goes, some interesting numbers last week. Uh there was 225,000 uh tons crushed in the in the system by COPA this week. 2 weeks ago, we actually hit an all-time high of 264,000.

[00:11:56]So, there was there's actually been a pretty big decline in the amount of tons crushed through the first part of May here, which is interesting because we've now reached almost 16 million tons of crush capacity. This is data that comes from COPA. And um you know, it's about 15.97, I think it would be their implied uh total crush capacity. Uh so, we should be seeing higher uh we should be seeing higher weeks of crush uh because of that expansion, but obviously, we are not.

[00:12:26]So, that does raise the questions about uh it raised some concerning questions.

[00:12:30]We posed them in our weekly report this week. Uh that does bring the the one thing that this does make look bad is the uh the crush capacity utilization, which dropped to 73.3% this last week, which is uh you know, a bit of a two two-fold. One is the low crush number at 225. The other is the increased capacity, so the percentage of capacity utilization has hit its lowest point since uh the middle of the middle of August.

[00:12:57]Uh November board crush margins continue to be high. We continue to bring this up because the uh November contract, you know, the November futures for canola is still strong. I think this is part of the reason I don't think the crush plants have filled up their crush capacity for those months yet.

[00:13:13]Uh that may happen soon, though. So, uh you know, if you do need to deliver, you know, make sure you get some of those um if you need to deliver in fall, make sure that the crush plants are not filling up. And I mean, they tell you they fill up all the time, which may not be true, but you know, they do get somewhat filled up, I suppose would be the right the right words to say.

[00:13:34]Um, but they tend to be, you know, aggressive as we move into the summer to get that to get that done. And um, and so and um, uh, to get that done so that they have the supply for for fall.

[00:13:47]All right, let's talk about planting progress here. Saskatchewan planting progress 3% uh, as a result of last week's crop production report or the the crop progress reports. That's not uh, it's pretty low. We have a a slow start to the year. It's not the lowest that we have seen. Um, I think that a good amount of weather will allow this to get caught up really quickly. Alberta planting progress 6.1%.

[00:14:10]As you can imagine, that was largely in the south part of Alberta where they tend to get going significantly sooner.

[00:14:17]When we look at kind of central Alberta, here's northeast Alberta planting progress 0.1%.

[00:14:23]I do think that one of our consulting clients uh, messaged me today and said he was in the field. Uh, so I think there's some wheels turning, which I think makes people quite happy.

[00:14:33]In in Manitoba, the total amount of seeding done is 2% uh, versus 8% last year. So again, a slow start to seeding uh, across the uh, across the prairies.

[00:14:45]All right, that is uh, all we have for you today. Thank you for joining us.

[00:14:48]Remember to subscribe and we will see you again tomorrow.