Fund buying, green screens, and winter grain sales — a LIVE! Q&A with Wendy White

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It’s a great day to talk grain markets, because, hey, the funds are in and the numbers are looking good!

And so we kick off this RealAg LIVE! segment with market analyst Wendy White of Viterra. From where the good news on crop prices is coming from, to supportive moves in canola exports, and on to what’s happening in the Black Sea region, this segment is a must watch/listen for Canadian grain farmers.

Tune in every Tuesday, Wednesday, and Thursday at 3 pm Eastern on Facebook, Twitter, YouTube or Twitch, for the latest LIVE! segment

  • Lots of green on the screen today for markets, which is always nice when hosting a market Q&A
  • Good day to be a grain buyer, too. Set those target prices for days like today!
  • Pricing grain is always emotional and always stressful. Hitting a price target is a good thing — even if the price goes higher
  • Why ARE we so green?
  • U.S is having some inflation conversations and allowing some inflation to happen; trade talks with the U.S. and China is good; Chinese buying is solid, too, which is part of it
  • Funds and managed money showed up in the market this week and for good reasons!
  • Lower crop scores happening, more export demand, but all of it is pure speculation. Buy the rumour, sell the fact, right?
  • Looking at harvest months and canola prices….hitting or exceed $500 during that time is pretty significant
  • Canola supply is still getting eaten up even without China being the big buyer (directly)
  • Farmers are holding on to canola and those bins are locked tight, waiting on better prices
  • European rapeseed crop could be poor again and could draw canola out of the west. In 2015, exports were 462, 000 metric tonnes; in 2019 it hit 2. 1 million metric tonnes and this year, 2020, it’s estimated to hit 2. 7 million metric tonnes to Europe (there are many reasons: drought, government regulations on varieties and on pesticide use, etc). It’s a long-term, structural change.
  • European demand has made up for some of the Chinese lost demand
  • Canola to Europe has to be certified sustainable. So talk to your grain buyer to get certified
  • Chinese canola seed sales are down, but oil purchases are up significantly.
  • The Canadian crush market is doing well!
  • If they don’t show up to buy in that futures market, the prices deflate (and that happens)
  • What about basis? Nearby basis levels are for sure impacted, so I hope you locked some of these factors in a while ago, hint hint nudge nudge
  • December forward have attractive basis levels, so check that out
  • Now, let’s talk Russia and the Black Sea Region. Russia has secured Egyptian demand.
  • Turkey is out with a big tender. So are many other countries. The low U.S. dollar is probably pushing some of these tenders to move forward or be large, and replenish supplies. What does it mean for Canadian wheat?
  • January is when real movement picks up. Harvest is going well. Grades look good so far (but it’s really early)
  • Check out what has the greatest downside risk? Move that off the combine/early vs. storing it.
  • Durum demand recap: price expectations are always higher; it’s a specialty product. They’re happy to lock bin doors, and may have to this year.
  • Are Canadian farmers going to stay competitive vs. Russia and South America? Russia first: not yet at Canadian levels for infrastructure or agronomy, but we’d be in for some low prices if they ever caught up (or when?).
  • Corn and soy markets will all be about demand, we know supply is enough. Opportunity can during the “what if?” time period
  • Funds push markets, or we’d be stuck side-ways for a looooong time
  • Malt barley demand? Has COVID impacted this industry? Domestic malt barley has been hit, for sure. Exports have been impacted, too, but less so and new crop is looking better.
  • Good news on the flax side, even with increased acres, demand has been super strong
  • A domestic oat market only is bad news — the price is totally dependent on keeping exports going, and we can price ourselves out of the market

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