Big things happen in a big world and yet somehow the grain markets are still transfixed by what number the ProFarmer Tour is likely to come out with on Friday regarding corn production estimates for the U.S.
Neil Townsend, Grainfox market analyst, says it’s a bit strange to think that Russia can literally bomb infrastructure in the Black Sea region right now, and somehow that doesn’t have a huge impact on markets.
While we’ll reserve judgement on the U.S. crop for now, if only because we are ahead of the conclusion of the tour and the week’s weather is wilting the crop as we speak, there’s plenty to dig in to on the global scale and right here in Western Canada. (more below…)
To the positive, what looks relatively bullish is the grains and oilseeds sector, at least in the short term; plus Australia has had an okay year, but a return to dry and very dry weather will curtail production there. Word out of the Black Sea is that although more crop has moved out (by land and river), the quality is not great.
Here at home, wheat harvest is ramping up and broadly speaking there’s perhaps a bit more to go in to the bin than expected, but by no means is that a universal feeling. Production is not as bad as 2021 but not as good as 2022 for most, Townsend says. For oats and pulses, however, yields have been more disappointing.
Moving to canola, the estimated production figures bounce between 16 and 18 million tonnes, which is a really wide range at this point in the season, he says.
“I think we’re under 17 [million]; we’re going to be in a pretty tight situation, just with the regular crush, and the regular sort smaller crop influence export program, but I am getting a sense in some of the reportage going around the diesel, renewable diesel plants is that there’s a bit of deferral going on,” Townsend says.
There’s still support at the state level in the U.S. — California, Oregon, and Washington State, for example — for renewable diesel, but there seems to be a slowing of momentum for renewable diesel and the associated crush expansion planned for ’24, Townsend says.