The sun is shining, birds are chirping and my yard is a sloppy mess. That can only mean one thing—spring seeding is just around the corner. I am having fun anticipating the promise of a new crop year and what might become this year. Luckily, I have this week’s dismal market report to temper my excitement and keep me grounded.
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Take notice: Markets are wild in anticipation of what the USDA report has to say next Wednesday, March 31.
In case you haven't heard, there is large container vessel blocking the entire Suez Canal in Egypt, which is the second-biggest engineered shipping canal on Earth! It is currently backing up more than 150 ships and could take weeks to get free. We have yet to see how this will impact grain shipments.
Canola: Taking a beating. May futures close limit down today and July isn't too far behind. Old crop prices remain under heavy pressure from the news of Eastern Canada importing cheaper Ukrainian canola for the crush plants.
Nothing we don't already know: old-crop supplies are remarkably tight and there’s lots of spec fund money in the markets to accentuate the movements of the market. As for new crop pricing, there is not a large increase in acres expected for this year and as such our stocks will not quickly build up. Therefore, new crop prices will be heavily dependent on our ongoing weather conditions and if dryness conditions persist across the Prairies. Just a note—meteorologist Drew Lerner believes that the Prairies will get enough rain come April and May to alleviate the current dry conditions in time for seeding but cautions that a drier bias could return for the summer months.
Monday to Wednesday we saw certain $19/bu June-July delivery specials offered before prices took a hit. This market could make a breakout move either way depending on next week's USDA report.
In other canola news, if you haven't already seen or heard, Richardson Pioneer is transforming its Swan River, Man., elevator to be a high-throughput elevator (operational by Aug. 2022), and also doubling capacity at its Yorkton, Sask., crush plant (fully operational by early 2024). This will make it Canada's largest crushing facility.
Soybeans: Futures are bouncing around their highs and are looking towards that USDA report for signs of direction. There is a lot of spec fund money that can really accentuate the moves whether they be up or down. It will remain extremely volatile. The fact remains, though, that U.S. soybean stocks-to-use ratio will be low. But how low? This upcoming USDA report will shed light on intended soybean acres; are they up considerably or not? How much wiggle room is there? The weather this growing season is also at top of mind as there is widespread dryness across the U.S and a projected tight stocks to use ratio (like canola).
Wheat: All wheat futures lost some ground due to spec fund selling, Russia raising both its wheat production estimates and export plans as well as some rain falling across the parched U.S. southern Plains (improving its winter wheat ratings). This hit the Kansas market the hardest of the three. Wheat markets do not have the same level of excitement as corn and soybean because of large global supplies. The good news is that some basis levels improved mid-week which helped cash bids hold up.
1 CWRS 13.5 was fetching $8.50/bu bids for June-July delivery and is now down roughly $0.20/bu. New crop prices are sitting around $7.90/bu Feb.
2 CPSR 11 (and lower protein CWRS) old crop was fetching $8.00/bu at some locations and new crop $7.00+/bu.
Barley: Many new crop barley bids, and even certain malt barley bids, have lost some strength in anticipation of record acres being planted this year.
As mentioned before, many sources say feed barley is the crop to have priced and forward contracted. Check out who is offering what and where, as bids can easily vary by $0.50+/bu.
Watch to see what happens with corn next Wednesday for the USDA report. It could have some surprises in it.
Peas: Fairly steady bids this week. I have seen different bids increase for old crop green peas, however, some new crop yellows have lost some strength.
Around the farm: Not sure Mother Nature got the spring memo here, but our snow isn't quite gone yet and they are calling for another five to 10 cm this Sunday night! I won't complain though since I have farmer friends that would take all the moisture they could get right about now. Also, it always forces me to relax just a bit longer before the spring rush.
As with the previous weeks, we just kept loading and loading wheat out. Also working on maintenance and buying some parts and oil. Our salesman said oil prices were increasing (he said by about $10/pail) in the coming weeks due to the U.S. not being able to get the supplies or something like that....so it may be a great time to take advantage of the sales that are on now! Just sayin’ ;)
This weekend is our last weekend to ice fish, and the weather is supposed to be beautiful until the snowstorm comes, so maybe we'll go! Whatever you're up to … have a good one!