The grain markets offered farmers a gift this fall with a harvest rally. While highs may have been locked in for some crops already, there is still plenty to talk about ahead of the busy shipping season.
For this episode of RealAg LIVE!, stand-in host Kara Oosterhuis is joined by Chuck Penner, founder of LeftField Commodity Research, to cover everything from the latest WASDE report, StatsCan numbers, trade flows, and prices of flax, mustard, barley, wheat, lentils, peas, faba beans, and chickpeas.
- Let’s start with the WASDE! Corn and soybean impacts. The USDA made some production adjustments down and added exports in. Suddenly ending stocks are tight.
- Soybean ending stocks may also have tightened up, and the market responded quickly
- (But markets have largely given that back already)
- This harvest rally — what the heck? Well, let’s break it down. There will be another StatsCan estimate this year yet.
- Early harvest has set the expectation of a good quality crop
- There’s more grain out there than StatsCan says, Chuck suspects, based on crop price movement
- Example: pea prices
- Maybe there is more in the durum market, too
- Flax! There’s no reason for us to have the prices we have right now. Maybe production was lower, or there’s something going on outside of our borders.
- Caution: the $17-$18 bids is a record. This year’s market shouldn’t push prices beyond this record.
- The Kazakh crop is not necessarily smaller, but it’s having some issues getting out of the country (perhaps defaulted on contracts)
- Barley out of Australia and into China is shut out. And Canada is benefitting 80 per cent import tariff right now!
- Barley crop in Australia was actually finally good. But prices have dropped considerably and is moving to other countries.
- Canadian barley exports are about double year over year. Decent prices.
- Mustard prices have been sleepy. StatsCan needs to move numbers, Chuck says. It’s been underestimated and there is more mustard out (yellow, brown, oriental)
- Kabulis? Chickpeas are kind of sad, and Chuck has been wrong before! Massive supplies going in to 2021
- We’ve been up against cheap Russian chickpeas; larger chickpeas might have more upside potential
- Where will we see prices in summer? Depends on
- What about the change of president to the south? Oh boy. Farm payments driving up soy and corn production? What about dealing with China?
- South American weather gets a mention
- Faba bean prices are likely going to struggle to rally from here, but have limited downside
- Likely will be a challenge to get tannin fabas out the door. For the Snowbirds and those types, it will ride the feed prices higher, though
- What about expanding pulse acreage? Disease impacts may keep acres in check
- What about a 2010-2013 bull run? It’s setting up similar to that. Tighter supplies could mean a few good years ahead. High prices draw some marginal land into production.
- Red lentils moving up the last 3 months — will it continue? Aussie crop is going to come in, and it’s going to be large
- Railway movement begs suspicion
Subscribe: Apple Podcasts | Google Podcasts | Spotify | RSS | All Podcasts
Please register to read and comment.