Grain markets this week performed better than expected.

P.I. Financial Commodity Futures Advisor Adam Pukalo says the Canola July contract was as low as 693.10 on Monday, but rebounded to around 735, while the July Minneapolis wheat contract was up by 30 cents a bushel to 8.28 for the week.

Pukalo said one of the factors pushing wheat futures up is the Russia-Ukraine conflict, specifically the uncertainty around the Black Sea Grain Export Agreement.

“Escalating tensions in the Black Sea region has traders uncertain if this safe corridor that allows Ukraine to export crops through the Black Sea will be extended beyond May. Wheat in much of the European Union has seen favourable conditions so far this spring.”

He says he has seen this before where tensions escalate then grain markets rally, then something happens overnight and the markets go back down.

Regarding canola, Pukalo believes its resurgence is influenced by a price surge in other commodities, such as palm oil and soybeans.

“Canola might get back up to around that 750 area on the July contract, and I think that might give producers maybe the opportunity to be hedging some new crop on the January and November contracts in those further outlines.” he added.

The U.S. Department of Agriculture will issue its first global estimates for the 2023-24 season next week, according to Pukalo.

“The USDA report is one to kind of give some signs for maybe where the global production and supply are, and that might set the tone for next week.”

You can hear the interview with Adam Pukalo below.