Last week the USDA released its latest world agricultural supply and demand estimates report, raising estimates on soybean production.
The report put soybean yields up by about one point five bushels per acre, and raised soybean crush by 10 million bushels.
Neil Townsend, Director of Market Research for CWB, which is becoming G3 Canada, says the increase in soybean is seen as negative to the oil seed complex.
He talked about what it means for canola, "I think the jury is still out a little bit on what the final Canadian canola will be. In terms of the G3 estimates that we have, we are on the low side of the trade estimates for canola production which kinda says that's says that could be fairly positive for canola prices potentially because there would be a smaller supply. unfortunately it looks like the crush margins in Canada are fairly negative right now."
Townsend said wheat prices have been beaten down recently, and this report will limit the ability for prices to go up again because it shows the world wheat supply is so big.
"The world wheat crop is now estimated at a record, all time record 731 million tonnes and that has also pushed stocks up to a very large amount too of 226 million tonnes, these just kinda highlight the fact that supply is running well ahead of demand and until we see demand emerge this supply is going to be a problem which is going to put a cap on where prices can go."
The report shows global oil seed projections for 2015/2016 are down almost 2 million tonnes from last month.
The report also showed a 25 million bushel drop in projected US wheat exports for 2015/2016.