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Weekly Market Recap:
Another wild week! StatCan's report confirmed our terribly low supplies of all grains with the exception of corn and soybeans. Just as a general overview, the drought cut supplies hard pretty dang hard. Compared to Dec. 31 last year our canola stocks are down 43%, barley is down almost 44%, wheat, excluding durum, is down 33% and durum itself was hit the hardest with a 56% drop. Peas, lentils, chickpeas, mustard were also all cut by one-third if not more. The only commodities that had the smallest changes were corn and soybeans stocks, +4% and -6% respectively.
Read on for highlights/lowlights.
Deals of the week: $12.75/bu old-crop CWRS, $19.25+/bu new-crop canola
Canola: Canola continues to disappoint. We are seriously lacking export demand. Most, if not all our canola, is destined to our domestic crushers. Main line companies are taking canola in and storing it, only to have it moved later to crushers. Crush plants aren’t running at full capacity but we cannot expect them to with the little amount of canola that is in the countryside. Still, a little more demand would be nice right about now.
Thursday, canola markets zoomed higher (after the trade sided with much lower South American soybean numbers by private analysts than reported by the USDA) in early morning trade but failed to hold any gains and closed lower. Old crop canola futures are not showing a strong tone right now.
November canola futures are gaining ground, assuming so to buy in acres for next year. Many new-crop prices are now over $19/bu so check out your local area!
Soybeans continue to push higher. The USDA report didn't shake the markets as it did not make any big downward revisions on its South American soybean production forecast. Meanwhile, other private analysts estimate much lower supplies and the market has been siding with them. China has been continuously making purchases of U.S. soybeans and chasing the market higher. Also, South American weather remains drier than normal. There have been rains in the forecast but few of them actually fall.
Wheat: Wheat futures are coming to life today. Earlier this week, StatCan did surprise the market with lower wheat stocks than anticipated. The USDA also had lowered global wheat ending stocks to a new 5-year low. Still, the wheat futures are focused on the Russia-Ukraine conflict. It's wild. One minute there's a report that Putin is backing down and then an hour later, like today, there are reports that he may invade before the Olympics are over. Tensions are escalating, so wheat rallies. Putin is undertaking naval exercises in the Black Sea that may affect shipping out of the region. It'll be very interesting to see how this all plays out. On the backburner is La Niña, dryness across the U.S. winter wheat belt and the southern Prairies.
I expect Feb. 14-18 to be another crazy week so get in some targets and speak to your merchants if you have wheat to sell. There were a lot of specials coming out for wheat. Mainline companies are seeking nearby deliveries and appear to be caught short. They may be able to throw in a few bonuses and let you know what’s triggering or where to shoot for. It looks like $13/bu CWRS is back in play!
Barley: Barley bids are holding. Certain old and new crop bids have gained strength. Strong corn futures have helped. Make sure to shop around. There is some demand popping up as transportation disruptions are causing delays in feed supplies. It is also widely expected that lower acres are going to be planted this spring.
Corn futures are high right now. The USDA lowered Brazil's corn production slightly from last month although most still believe its numbers are too high. Argentina's production remained the same. Either way, corn stocks look to be in adequate supply worldwide.
Peas: Seeing some mixed price movements. Check them out as we have noticed some bids pick up.
Oats: A little bit of upward movement was seen this week.
Around the farm: I returned home! At least I missed all the cold weather and arrived back to warm temperatures, even rain! By the way, flying with the restrictions wasn't nearly as bad as everyone makes it out to be. I booked a PCR test down there and found a free test to get, although it clearly stated online 'not for travel'. It’s a big money grab as they want travellers to pay for one. Either way, this free one worked just perfectly and got me home.
Other good news, I was also informed that fertilizer prices may be dropping a bit more next week, so if you're like me, someone who refrained from purchasing fertilizer last September, this is welcome news!
Have a great weekend.