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Just. Like. That.
(Crop is in and growing.)
Hey, I’m back! It's been a couple of wild weeks to say the least, in markets and on the farm. I hope you had time to still check in on prices and even make some sales while wheat soared to its highest levels yet with bids reaching above $17/bu! Since then, they have backed off but nonetheless, it has demonstrated perhaps how high it could go again before experiencing resistance. No matter what you are doing, make sure to make time to check in.
Or, if you do not want to, just check in on Farmbucks and we’ll do it for you. If you have the app, you already knew wheat went bananas (in a good way!) recently and perhaps were able to capture top prices for your crop. Either way, we have the most up-to-date prices and we stream canola bids for free 24/7 so you can dip your toes in the water before completely diving in!
Weekly Market Recap:
Monday, May 30, U.S. markets will be closed for the Memorial Day weekend; risk-off type trading today as a result.
Canola: Choppy sideways trade. Canola futures have been bouncing around, remaining above their support levels. Good planting progress is being made across the Prairies although there are delays due to excess moisture in Alberta’s Peace region, SE Saskatchewan and Manitoba. Much remains to be seen as to the size of crop we are able to grow this year and as it becomes more clear, new crop prices will adjust accordingly. Tight supplies of veg oils globally, soaring soybeans, and strength in crude oil are all supporting it. I've heard some additional late demand came into play thus $28/bu old crop canola targets were triggered this week.
In other news, Indonesia reversed its export ban on palm oil, however, the country is imposing a domestic sales obligation. Malaysian palm oil production is forecasted to climb higher than last year's levels.
Soybeans saw a big rally yesterday are at the top end of charts! Strength in crude oil, strong demand and export sales for U.S. soybeans, more wet weather delayed planting in Minnesota and North Dakota and news that China would release 500,000 tonnes of soybeans from its reserves all contributed to the strong gains. Prior to this, soybeans struggled due to decent U.S. planting progress and Chinese COVID lockdowns which have reduced its soy oil demand.
Wheat: What a ride! Wheat flew to new highs on May 17th after India announced an export ban on wheat. As more information was released it was realized it wasn't an all-out ban so spec money ran out the door. Wheat markets continued the decline early this week, as rumours swirled about Russia allowing Ukrainian wheat to be exported. This came with conditions from Putin though for the West to remove its economic sanctions against Russia. As it became apparent that that would be highly unlikely and with the USDA cutting its Indian wheat production numbers to 99 MMT vs. 110 MMT last month, wheat markets turned around and showed a nice strength this Wednesday onward.
Minneapolis wheat is performing stronger than Chicago and Kansas wheat futures due to the fact that the bulk of where spring wheat is grown is experiencing ongoing planting delays/challenges due to wet weather. As of last Sunday, U.S. spring wheat seeding progress was pegged at only 49% vs. the 83% average. This is the slowest pace in more than 20 years. Its two biggest spring wheat growing states—Minnesota and North Dakota— which grow 2/3 of the U.S. spring wheat crop and were at a mere 11% and 27% planted, respectively. France has also gone through patches of dry weather deteriorating its crop conditions. Looking across old- and new-crop spring wheat prices, cash bids aren't that far apart. Old crop bids are currently reaching over $16/bu vs. $15.80/bu new crop.
Kansas futures aren't performing as strong as Minneapolis because there's less uncertainty. The market already has the terrible U.S. winter wheat crop ratings factored in, rains fell across some drought areas to the north where it can still help some of the later seeded wheat and harvest has started in Oklahoma and Texas.
Barley: Some specials, here and there for old-crop barley. Decent prices for new crop, too. Not a lot of movement in bids have been noticed in the past couple of weeks.
On the corn front, China signed an agreement to allow Brazilian corn that was previously under phytosanitary restrictions to be imported. There are reports that Ukrainian farmers did manage to plant corn, albeit the acreage is 22% lower than last year. It remains to be seen if farmers can harvest this crop in addition to export logistics questions. American corn planting progress is just slightly behind the five-year average. The biggest drag is, again, in Minnesota and North Dakota which are well behind average, however much of the corn belt has had some favourable seeding weather the past week and farmers are getting much of the crop in the ground. In addition, conditions seem to have improved over much of the corn belt with the U.S. drought monitor removing much of the dryness there.
Peas: Multiple companies suggested farmers make old-crop sales and capture today's premium (bids of $16-17/bu) vs. holding and risking only to receive new crop values (sitting around $14-15/bu). The reason being, China has announced that it will accept Russian peas, providing direct competition for our crop. There is a lot of speculation and uncertainty surrounding how much China will actually import from Russia this coming year, but it forces us to pay attention since China accounts for about 80% of our previous yellow pea export sales. Pea prices have seen support with bids increasing slightly from a lack of farmer selling, but this aside the market is waiting on more demand, seeding progress and weather news.
Oats: Oat futures gained ground again! Some cash bids have, too … slightly. Cash bids are not always directly correlated to futures. Perhaps the wet weather in the eastern Prairies is some cause of concern supporting cash bids.
Around the farm: We got the acres in the ground and seeded with minimal hiccups but hiccups nonetheless. I'm not sure we had a single day of no breakdowns or having something to fix. Patching air seeder hoses (if anyone knows of anything that lasts longer than two years please let me know!), service truck breakdowns, burned belts on augers, getting stuck, breaking bolts, and spilling seed wheat then shovelling/salvaging what you can until 2 a.m. There was no shortage of challenges around here! One day at a time, though, we got it done!
I also want you to know that although we are busy doing a million things, markets are still moving and Farmbucks is still running and searching for you at all times! Even some cool new changes are coming to help you even more, that I promise you! Stay tuned...
Stay safe out there, take your time and get some sleep, too! You got this! 🏼
Cheers!
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