Grain prices: Dry snap in Canada bumps wheat, canola prices

A run of hot, dry weather in Canada and Russia has influenced global grain prices. See the latest market insights.

As grain growers in southeastern Australia struggle to source urea to capitalise on recent rain, crops of high protein spring wheats in northern hemisphere struggle with dry weather at a critical phase of grain development.

Hot and dry weather has been the dominant weather pattern along the border areas of Canada and the US.

Prized high protein spring wheat crops grown in Alberta and Saskatchewan of Canada and Montana and North Dakota of the US, have received less than 40 per cent of the average rainfall in the past 30 days.

This coincides with report from the US Department of Agriculture that the spring wheat is approaching 33 per cent headed in Montana and 47 per cent in North Dakota.

This same weather pattern contributed to a $17 a tonne rise in Canadian canola futures last week.

Coincidentally a similar weather pattern has dominated the weather in the Central and Volga regions of Russia where 40 per cent of Russia’s spring wheat is grown.

Wet weather is also supporting prices with excessive falls 50 per cent higher than the average hitting winter wheat crops in Oklahoma and Kansas where the harvest progress is reported as 46 and 80 per cent respectively by the USDA.

Last week this price-supportive news was combined with some substantial cash purchases from the large North African markets.

There is a general sentiment in Europe that Russian wheat values are near their lows.

Once again, negotiations for the extension of the export grain corridor in the Black Sea are not looking positive.

The United Nations-brokered deal has been in place for a year and is the current round is due to expire next Monday.

Russia is threatening to quit the deal as officials look for more concessions for Russian exports of grain and fertiliser.

Despite this news, markets saw little change as the sentiment was offset by bearish news leaving values at the start of the week at similar levels.

Much-needed rain through the US Corn Belt and the tide of wheat’s harvest pressure in the US served to pull down wheat prices.

New crop wheat did manage a $6 rise to $389 a tonne and new crop canola prices have maintained the same higher prices of $692 a tonne on a Geelong port basis.

This canola price sits at a percentile of 65 compared to the prices of the past five years.

Meanwhile, mixed signals in domestic and export markets may still provide hay growers with some future selling opportunities.