Major grains & oilseeds markets –

There was nothing in the WASDE reports that startled the markets. Upon closer examination we are starting to see some potential for support to current prices. We still show decent world carryovers’, but the feed grain carryover was reduced by 5 myn tonnes and total world grains by close to 6 myn tonnes. If we get some weather problems with the coming crop things could tighten up quickly.

Soybeans There were no surprises in the WASDE report. The USDA left the March estimates virtually unchanged versus the February projections. South American soybeans are now cheaper than US origin and we expect the corn bean ratio for the old crop to narrow from 2.56 – as the supply of South American soybeans becomes more reliable. The new crop ratio is about in line with the balance sheet.

Canola – The Canadian dollar is weaker, canola continues to be cheaper than soybeans and the Chinese are looking for more canola offers. This is supporting canola futures. If more railcars were available, the Chinese would likely take all offers of canola in our view.

Wheat – Wheat markets are now focused in on weather with rains over the coming 2 months the key to Northern Hemisphere yields and Southern Hemisphere plantings. The markets will also be looking very closely at FSU crops to see how they came through the winter. Any prolonged dryness in the Plains will spark further fund short covering. Cash bids to Canadian wheat producers are terrible; they are the lowest in the world and will not get better while the elevator industry and railroads have a monopoly on the transport system.

Barley – Tunisia bought 25,000 tonnes at $205.50 C&F for Apr-May. FOB barley has dropped to $190 FOB out of the Black Sea.

Oats – Cash prices for oats when denominated in Canadian dollar terms make our oats attractive to US millers, so forward demand will be relatively good from that region.

Peas Domestically, prices remain supported by the weak domestic currency. As of Friday, the Canadian dollar is down to 78 cents, which has the potential to translate international prices another 25 cents/ bu higher than last week. However, given the slowed shipping pace and harvest activity in India, prices may have peaked for now. However, in India unseasonal heavy rains accompanied by strong winds since Saturday in Rajastan, northern India, have apparently caused significant damage to standing crops in fields not yet harvested. We expect India to come back into the market, though the timing is uncertain.

Lentils – Bulk lentil loadings during week 31 were negligible, but are still double those of last year.

There are still a full 51,000 mt of lentils sitting in Pacific terminal elevators, so there will be further bulk lentil loadings over the coming month.

Transportation – The shipping performance continues to be quite poo and stocks at primary elevators continue to grow. In week 31, the railroads allocated only ~5,200 railcars (468,200 mt), which represented only 16 percent of what was available to load. Elevators that could not load 112 car trains remain plugged. As primary elevator stocks grow – “basis” is widening by extension.