Setting up a plan to make the most of volatile markets

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There’s a lot of moving pieces going on in agriculture right now, and one of those pieces is the international crop.

Just because we are talking international, doesn’t mean the crop doesn’t face one of the number one issues ours does domestically — the weather.

As a function of La Niña conditions lingering, Australia has benefited with three straight years of really great weather, and those conditions are expected to stick around, explains Brennan Turner, grain market analyst and founder of Combyne Ag. However, even though conditions may be favourable, currently, there is rain hitting eastern Australia quite hard; an area that produces a lot of wheat and barley.

As a result, there are a lot of quality concerns coming out of eastern Australia right now, which in turn, could be a net positive for Canadian grain.

“The final tally on that problem won’t be known for at least another couple of weeks yet here. But this was kind of there in the opportunity for our farmers to know exactly what you have in terms of quality in the bin, and maybe think about setting a couple of targets,” says Turner. “As the market moves in the direction of okay, we need to buy better quality, we need to look for places like Canada that has it because it can’t source from Australia.” (Story continues below interview)

The other area where the year has had an impact on the southern hemisphere is Brazil — specifically, the second largest producing state in Brazil for wheat, Paraná. They too have been facing negative rains during harvest time.

“That impairment, intuitively would mean that they’ll have to import more wheat. Usually they get it from Argentina, but Argentina’s crop this year has been negatively impacted because it’s been dry in Argentina. So their wheat production is a lot smaller than it normally is there, and again, more opportunity potentially for Canadian wheat to find its way down into South America potentially,” he explains.

“I think at the end of the day, there’s going to be plenty of opportunities here over the fall and winter months from a marketing standpoint. It’s a matter of being prepared in terms of knowing your quality and having those targets in place, having conversations with your buyers. The opportunities to make some good sales are kind of around the corner, in my opinion.”

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