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Mikkel Pates / Agweek

Potential for easing of trade disputes?

Close only counts with horseshoes and hand grenades, but could the U.S. be approaching some resolution for trade disputes? It appears that the North American Free Trade Agreement could be resolved with the U.S. reaching a deal. And at the end of the month, the U.S. and China are set to sit down and discuss some issues.

Wheat

Wheat markets started the week on a softer tone following last week's supply and demand estimates from the U.S. Department of Agriculture. U.S. harvest is progressing well, with the winter crop nearly done and the spring crop at 35 percent completion (compared to 27 percent for the five-year average). But a rally late in the week came when the Russian Agriculture Ministry announced that Russia is considering capping wheat exports at 30 million metric tons this year. This could shift some demand to Canada and the U.S. due to lack of available supply in other exporting regions like the European Union and Australia.

Durum

Durum prices remain steady holding at very low levels. The North Dakota crop remains in very good shape, with the USDA reporting 81 percent of the crop rated good to excellent. Harvest is just getting started in the U.S. and Canada.

Canola

The canola market firmed up this week. Some support from the Chicago soybean complex spilled over to canola. Additionally, the hot and dry weather to finish the Canadian crop has resulted in expected yield loss. The extent of these losses is not known at this time, so the market is hesitant to rally too much and price itself out of competition with other oils. Look for canola prices to track with the soybean oil market until official production is known at harvest.

Peas and lentils

In Saskatchewan, pulse harvest is progressing well. Roughly 20 percent of the crops have been harvested, and another 20 percent is ready to be harvested. Though reports are coming in that yields are average to slightly below average so far, quality is good. The result of the good start to harvest season has been some price pressure for peas and lentils.

Mustard

Mustard seed harvest is getting under way in western Canada, but there has been little progress reported for the market to trade on. Prices have been steady and there has been light trade in the last few weeks.

Barley

The USDA reported barley harvest slightly ahead of the normal pace: 41 percent of the crop is done compared to 38 percent for the five-year average. The remaining crop saw conditions improve to 81 percent good to excellent compared to 79 percent a week ago. Weather forecasts in the coming week show some rain that could slow harvest progress in Minnesota and North Dakota, but these are the areas that are already well ahead of the normal pace. As a result, there is not any significant worry (from a macro perspective) for the harvest efforts at this time.

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