Canada Markets

European milling wheat is seen breaking above technical resistance that could lead to increased buying interest.

A reported 632,962 mt of canola was crushed in the month of August, while we look at implications for the balance of the crop year due to a recent change to AAFC's forecast crush.

AAFC's September forecast shows a huge year-over-year increase in wheat stocks, while canola is one of the few crops forecast to see stocks fall in 2022-23, based on Statistics Canada's most recent production estimates.

The November delivery canola basis has shown strength during the first 20 days of September and during harvest.

Canada's Consumer Price Index fell to a level that was slightly below expectations in August, although the gains from lower gasoline prices were moderated by a continued increase in food inflation.

AG Transport Coalition's Weekly Performance Update for week six shows the weekly demand sharply higher from the previous week while the percentage of cars spotted in the week wanted was reported sharply lower.

As of week 6 or the week ending Sept. 11, we look at producer deliveries into the licensed handling system and how this compares to recent years.

When 2021-22 data is omitted, estimated crop year supplies of canola for 2022-23 is the lowest seen in the previous six years or since 2014-15.

Today's September Statistics Canada production estimates, based on August model data, saw little change overall to the forecast for Canadian production. The largest changes included a 400,000 mt lower revision for canola and a 488,036 mt upward revision for spring wheat.

The USDA revised global wheat production higher this month to a record volume of close to 784 mmt, while global use is forecast to exceed production for a third year.

The USDA's rapeseed/canola estimates are bearish, including a record global production estimate. This week's Statistics Canada production estimates will play a major role in this forecast, while market watchers will be looking for signals of Chinese demand.

During the first five weeks of the 2022-23 crop year, demand for hopper cars, terminal unloads and terminal stocks are well-below average for this period, which will pressure railways to perform to meet Canada's forecast rebound in exports.

Canola broke through support along with palm oil. Rapeseed broke through support although losses were pared for a close above support. Soybeans, soybean oil and crude oil closed higher.

July 31 grain stocks were reported at significantly tighter levels, which may eventually add to the uncertainty surrounding crop year supplies.

Australia's ABARES revised higher its forecasts for 2022-23 production estimates, pointing to a big crop on the way along with more competition in export markets.

Statistics Canada has forecast larger crops this week, while combines are rolling across much of the Prairies. Despite this, Saskatchewan bids for several pulse and special crops were reported higher this week as prices attempted to stabilize.

The Canadian dollar reached its weakest trade since November 2020 on Sept. 1, while a breach of retracement support could result in a continued slide.

The Durum/HRS spread is historically weak for this time of year. Focus lies on the prairie production potential, while we know that Europe will look to Canada for durum despite a slow start to their imports.

This week's Statistics Canada production estimate is the first of two back-to-back estimates, while we calculate potential crop year supplies for comparison against historical supplies based on government estimates to-date.

Statistics Canada's crop production estimates, based on July model data, point to sharply higher crop production. At the same time, August conditions will be taken into account when the next report is released on Sept. 14.