(Be inspired. New highs reached!)
Longer days, warmer soil and crazier markets ... in other words a typical spring day! We don't live too close to Disney World but we were definitely on a pricing rollercoaster this week that started high, went low and is jumping back up to finish out the week. How do I know this? I'm glad you asked. My handy dandy Farmbucks app gave me a nice little vibration in my jeans to let me know when there was action. In the market, I mean ;)
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Did you miss this week's wild ride? Buckle up, because here's what went down!
Monday, Viterra formally announced that they are in fact building the world's largest canola crushing facility in Regina! Construction is set to begin early in 2022 and have it operational in 2024.
Statistics Canada released its Principal Field Crop Report on Tuesday and it did not have much effect on markets.
Quick recap: The crops gaining ground are canola, barley, soybeans and corn. Meanwhile, acres in wheat, oats, dry peas and lentils have decreased.
Canola acres are projected to be up 3.6% from last year but that number was still under the trade estimate (these numbers are NOT enough to replenish stocks). If you have been reading my eNewsletter it should also be no surprise that intended barley acres are way up, an increase of 13.9%! Flaxseed acres are slated to grow 6% while soybean acres are up 5.5% and corn 1.8%.
Wheat numbers are projected to be down 6.9% overall. The cut is coming from spring wheat acres (down 8.8%) and winter wheat acres (down 11.2%). Durum wheat is expected to have a negligible increase of just 0.3%. Oat acres are expected to decrease by 6%. Pea acres are dropping by a whopping 9.8%. Lentil acres are nearly flat.
All that being said, nothing in this report surprised anyone.
In general, markets were strong on Monday–Tuesday before taking a hit on Wednesday and ending the week on new highs (again)!
Canola: HOT market! Early this week, bids were strong but today they ended even stronger! I'm talking about old crop levels hitting $22.00/bu and new crop 16.50+/bu. Volatility remains high. If you look at July futures this past Tuesday and Wednesday, you'll see that from the high to the low in trade was $1.25/bu! It's going to continue to be a wild ride.
Crushers are still chewing through supplies at a record pace. Elevators are searching for canola to fill cars in the near term and are pulling further-out contracts to fill current needs.
The forecast remains mostly dry with scattered rains. EU rapeseed production numbers are being revised lower. The U.S. is importing soybeans from Brazil due to tight supplies. All this, lending a supportive hand for prices.
Wheat: Wheat climbs even higher. In just two short weeks bids have jumped up around $1.00/bu. Minneapolis is showing the strongest tone of them all (remember that spring wheat acres have decreased here in Canada and the U.S., there’s dryness concerns and more looming production unknowns with spring wheat). The Kansas wheat market is struggling the most as the winter wheat crops aren't hurting that bad and the crop is more established.
Wheat markets were strong early in the week before losing some steam mid-week due from spec fund selling and scattered rains through parts of the U.S. and South America. Today they regained much of those losses, if not more.
Corn remains strong right now due to dryness in Brazil (which is currently trying to grow its second corn crop) and ongoing demand which is pulling wheat higher with it. At these levels, feeders around the world are searching for alternatives, such as wheat, to incorporate into their rations. Weather remains of primary concern as dryness continues in Brazil, Northern U.S. and into Canada. The EU has also revised its estimated wheat production numbers to be slightly lower.
It was impressive to see $8.50/bu bids for feed wheat, and #2 CWRS 13.5 fetch $9.60/bu for immediate delivery and $9.25+/bu new crop. Meanwhile, CPS prices have had a harder time recouping its mid-week losses but there was the chance earlier to lock in around $9.10/bu mark for old crop and $8.50/bu new crop.
Barley: Prices are holding. High corn values and dryness are supporting factors. Also, there's just less barley to be bought right now as farmers hit the fields.
Pressure is expected to remain (for now) on new crop values as the projected acres to be grown is high and we will have competition from other countries in the feed grain market later. We shall see how seeding and the weather plays out in the coming weeks.
Peas: Old crop yellow peas still fetching decent prices as elevators look to fill contracts. New crop yellow peas are pretty quiet. StatCan’s outlook for pea acres is expected to be lower and with expected steady demand, the market should be well supported. We shall see if dry conditions affect our production and really tighten our supplies.
Around the farm: The weather is as extreme as these markets! I woke up to snow on Wednesday (I was thankful for the moisture) and then just today we have a high of 19°C! I am trying not to get too excited though because it’s only for one day before we return to the daily highs of 13°C and nighttime temps hovering above and below 0°C. It's too damn windy to spray my fields today so I quit waiting and am going seeding! I'll worry about killing weeds another day when it’s not so cold or windy. Good luck to all of you who have started! Let’s get doing what we do best and keep watch on these markets will ya!
On a quick diesel note: I was told prices were increasing again just slightly (half a cent). The best deals to be found are for 'direct drop', fuel received straight from the refineries just make sure you have room for 50,000L!
Happy Friday and happy seeding!