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To the moon ... let's goooo!
(Sky-high offers this week.)
Wow. These are no doubt exciting times in the marketplace! You're wondering: how much crop can/should I book at these levels? how much higher can it/will it go? what am I willing to risk? Meanwhile, it's seeding time and you've got other things on your mind, too! Of course, everything has to happen all at once! Markets are cruising higher, seeders are hitting the ground and we don't know if, or how much, crop we will end up with to sell.
It's rare to see prices at these extreme levels, you just can't ignore them. Farmbucks is here to sort out the information as we receive it. No bias. Keeping you informed so that you can pull the pin quickly when the time is right for you is our No. 1 priority, unless you don’t want us to tell you about $21 canola—your choice. Please note my friendly sarcasm ;)
Now let's get down to business.
Market Recap:
This week a couple things have made headlines.
The CGC (Canadian Grain Commission) suspended the licences of W.A. Grain & Pulse Solutions, effective April 20. If you are owed money for grain deliveries made prior, please contact the CGC.
Cargill announced it plans to build a $350 million canola crush facility in Regina. It plans to start the build early next year with the intention for it to be operational by early 2024. There is also rumours that Viterra also has plans to build a crush plant in the area, as well. And, don't forget, Richardson International had announced earlier that it similarly plans to double its capacity at their Yorkton, Sask., facility. These large investments in our industry are viewed positively for canola producers across the Prairies. (So is the push to use more biofuels and vegetable oils for green energy from our world leaders at the World Climate Summit to reduce our greenhouse gas emissions.)
Canola: Canola surging to new highs! Canola charged higher, following soybeans’ lead (especially this Thursday) before settling down a bit today. On Thursday, old crop hit $21+/bu and new crop reached over $16+/bu! Checking markets this week, Bunge was the leader across many months. Crushers are booking old crop deliveries for late July-August delivery. Remember that Ukraine canola is set to land here in August, but will it be enough to tie crushers over to new crop? Another interesting fact is that you can fetch more $/bu for canola delivered in Nov-Jan than you can after January 2022. The market is acting to secure more canola earlier on.
Next Tuesday, Statistics Canada will release its acreage report in which will probably show higher canola acres going in the ground this year. How much higher are they going to say it is? We shall wait to see. Although larger acres will be bearish news, it shouldn't be any big surprise. Even with, higher acres and an average crop size of canola, our production will still not be enough to relieve the tight supply-and-demand. Any kind of weather threat over our growing season can have a profound impact.
Wheat: Wow. All wheat markets rocketed higher (especially this Thursday). In interesting and bullish news, China came out this week and issued guidelines to incorporate more wheat, barley, rice and sorghum in their pig and chicken rations in place of corn and soymeal. Russian and French wheat production numbers have seen a slight decrease. There are also still forecasted freezing temperatures happening in Europe, here in Canada and the U.S. Not to mention, the dryness concerns for France, the U.S. Plains and the Canadian Prairies, too. Then there's the spec money jumping in on the action, as well.
StatCan is widely reported to decrease spring wheat acres. This, in combination with lower U.S. acres, should continue to show strength in the spring wheat market.
Barley: We have witnessed some strength in old crop and new crop feed and malt barley bids. Support coming from wheat and corn markets soaring higher. China’s ports are reported to be low on barley and corn supplies and it is turning to its wheat stocks to use for a feed source. Meanwhile, Brazil needs rain for its second corn crop that's currently growing.
For new crop barley, though, maybe don’t be too bullish. Caution, there are rumblings of much higher acres being planted here across the Prairies (hearing even 15+% increases where production could reach 12.5 million tonnes). These numbers are projected to be high enough to replenish stocks and keep pressure on prices. Also note that French and Ukrainian wheat will come available to the world in August, also keeping pressure on prices.
Peas: Pretty quiet and mostly unchanged. Some strength found for old crop and weakness for new crop yellows at a few elevators. StatCan’s outlook for pea acres is expected to hover around the same as last year. The pea market seems to be well-supported with steady demand for new crop, and so without any large acre increases here in Canada, any weather problem this summer could lift prices.
Around the farm: No one really wants to work too hard on the cold days, am I right? We had a few nice days earlier this week in which we took advantage to fix my landscaping, from the whole digging out my garden hydrant/hoe fiasco last week. If you follow me on Instagram or Facebook you would know how badly last Friday escalated ... from digging my hydrant out by hand, to getting a friend's mini hoe, to hiring a bigger hoe then accidentally ripping out my power line and hiring an electrician. It's still funny now but I'm still waiting for all the bills to come in! That will shut me up in a hurry!
Besides that, I received the remainder of my canola seed and pre-seed chem and pulled out the seed drill today! (see picture!) Our start to seeding is within sight but still no rush here.
Just for fun, this week’s dyed diesel quotes vary between $0.8330/L - $0.8756 level (taxes included). I'm told next week will be slightly lower.
Hold on to your hats and keep those eyes peeled on these wild markets my friends!
Cheers!
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