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Canada Know-Risk Market Outlook | Argentine Weather Forecasts Improve

By: Craig Turner, Senior Risk Management Consultant

Canada Know-Risk Market Outlook 
 
Craig Turner
Office: 312-706-7610
Twitter: @Turners_Take

Canola down 8, soybeans down 12, corn down 4, HRS down 5, HRW down 10, SRW down 8. 

GRAINS & OILSEEDS | The Ag markets are lower to start off the week as we head into the holidays at the end of the week.  Forecasts for Argentina are improving and that is the likely reason for weakness today.  S. Brazil and Argentina should receive beneficial rains starting at the end of the week. If the forecasts hold I doubt traders will want to be long heading into the three/four day weekend (US is off on Monday for Christmas but the UK is closed Mon/Tues for Christmas and Boxing Day).

Private grain industry group Coceral estimates 2023 EU + UK soft wheat production at 143.2 MMT, up from 140.7 MMT in 2022. EU corn is seen at 64.5 MMT, much higher than the 50.7 MMT we say in 2022 due to drought. Total grain output is estimated at 304. MMT, up from 285.1 in 2022.  Better weather conditions in the spring/summer should greatly improve grain and oilseed stock  levels for the EU by the fall of 2023. 

Corn and soybeans look bearish as the weather in S. America improves. Canola will struggle to stay positive if soybeans is selling off.  Wheat is neutral due to tight stocks and continued uncertainty in the Black Sea.  Wheat also has winter kill risk in the US with cold temperatures and not enough snow cover.  Odds are corn and soybeans lead the market lower and canola and wheat are reluctant followers.

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