Giving up

On Friday, November 8th, we got the first U.S.D.A World Agricultural Supply and Demand Estimates (W.A.S.D.E.) report in two months.

On Friday, November 8th, we got the first U.S.D.A World Agricultural Supply and Demand Estimates (W.A.S.D.E.) report in two months. The expectation was for higher corn and soybean yields and overall production, but the numbers that came out weren’t exactly as high as the market had priced in, especially in corn and soybeans. Higher yields than estimated (160.4 bushels an acre for corn & 43 bushels an acre for soybeans) but smaller harvested acres led to a move higher in the markets. Demand also was raised for both corn and soybeans, including a 275-million bushel uptick for corn and higher exports and crush demand for soybeans in this 2013/14 marketing year. As such, ending stocks for the 2013/14 marketing year came in below expectations, indicating that there’s less of those grains available. Finally, wheat was slightly lower initially because the U.S.D.A. raised both U.S. and world ending stocks.

With corn still near 3-year lows, it’s been rumoured for quite some time that there could be a decrease in the minimum amount of corn required to produce ethanol in the US (the “ethanol mandate”) which could come from the E.P.A. as early as this week. These two factors make it entirely possible that U.S. farmers are more inclined to switch some corn acres out for wheat (could we see corn rotating out in Canada as well? Very possible). The biggest substitutions are likely to take place outside the Corn Belt in states such as North Dakota and Kansas (Northern Plains region). Additionally, good moisture events in these areas of the Northern Plains have provided some of the best winter wheat planting conditions in years. Also providing downside support to soybeans is the fact the U.S. Food and Drug Administration is on track to ban partially hydrogenated oils, the main conduit for trans fats (and corresponding links to heart disease). This ban could result in up to four million U.S. soybean acres lost, according to the American Soybean Association.

Across the rest of the world, wheat conditions look pretty decent. The Western Australian harvest is apparently moving along well with good quality and good yields reported while the condition of the Argentinian wheat crop is improving. However, the USDA still downgraded the Argentine wheat crop by one million tonnes to 11 million tonnes total production this year (other estimates range from 8.8 million tonnes to 10.5 million tonnes). Also, with 94% per cent of the grain harvest done in the Ukraine as well, already 57 million tonnes have been taken off, beating the previous record two years ago in 2011 of 56 million tonnes.

With more grain out there in the world, Canadian pulse super-buyer, Alliance Grain Traders, said in their most recent quarterly filing that they are looking into expanding their business into grains and oilseeds. Business so far for the Regina-based company is good as Turkey and India welcome more lentils imports. Specifically, pulse growers in the former are planting more higher revenue potential crops (not lentils) while India has banned exports of lentils until March as they need to meet a 20.5 million-tonne-per-year demand (and growing!). Alliance, which already buys grains & oilseeds in Australia through a subsidiary there, would be in direct competition with the big boys, specifically the pulse supply agreement with Cargill that they’ll likely have to give up.

Brennan Turner is originally from Foam Lake, SK, where his family started farming the land in the 1920s. After completing his degree in economics from Yale University and then playing some pro hockey, Mr. Turner spent some time working in finance before starting FarmLead.com, a risk-free, transparent online and now mobile grain marketplace (app available for iOS & Android). His weekly column is a summary of his free, daily market note, the FarmLead Breakfast Brief. He can be reached via email (b.turner@farmlead.com) or phone (1-855-332-7653).

— FarmLead Breakfast Brief

 

Just Posted

Town to sign five-year policing agreement with Ponoka Stampede

The Town of Ponoka will go ahead with a five-year renewable agreement… Continue reading

UPDATED: Ponoka RCMP arrest male on Canada wide warrant

UPDATE for Immediate Release: Collin James Courteoreille was wanted on a Canada… Continue reading

Town passes 2019 budgets and tax bylaw with 2.2 per cent increase

Ponoka town council passed a $25.5 million 2019 capital and operating budget… Continue reading

CFO proposal will not impact future use of nearby land

Ponoka County objection nullified by notice land is outside setback area

Killer of Calgary mother, daughter gets no parole for 50 years

A jury found Edward Downey guilty last year in the deaths of Sara Baillie, 34, and five-year-old Taliyah Marsman

Is vegan food a human right? Ontario firefighter battling B.C. blaze argues it is

Adam Knauff says he had to go hungry some days because there was no vegan food

Winds helping in battle against fire threatening northern Alberta town

Nearly 5,000 people have cleared out of High Level and nearby First Nation

WATCH: Lacombe Generals celebrate Allan Cup victory with street festival

Hundreds come out to celebrate Generals fourth Allan Cup

First ever FanFest slated for Ponoka

Canadian sci-fi actor to be guest speaker at library club’s festival

CFO proposal will not impact future use of nearby land

Ponoka County objection nullified by notice land is outside setback area

Contentious property back in Ponoka County spotlight

Community complaints bring recycling business back to council to discuss allegations

Federal government funds millions to help B.C. police spot drugged driving

Many police departments have expressed wariness about using the only government-approved roadside test

Judge: Mississippi 6-week abortion ban ‘smacks of defiance’

The new law would prohibit most abortions once a fetal heartbeat can be detected

Most Read