Producers already thinking about winter wheat

As we get into the first few weeks of kids going back to school and farmers going to harvest, the agricultural market continues to trade

As we get into the first few weeks of kids going back to school and farmers going to harvest, the agricultural market continues to trade mostly around weather reports. Fresh supplies coming off the fields have pushed durum prices in ICE’s Winnipeg market to below $260 per metric tonne while a massive canola crop expected is offsetting the rally seen in soybeans in Chicago.

While we see pretty good harvest conditions here in the Canadian Prairies, things are a lot hotter south of the 49th parallel. As such, with corn and soybean crops still in development, there’s widespread speculation that the USDA will lower their average yield estimates for the two crops in their Sept. 12 world supply and demand estimates (WASDE report).

There’s much talk lately about U.S. crop insurance and its effect on the industry as a whole as the widely government-subsidized program is seen as just padding the pockets of farmers who’ve seen their income broadly improve in recent years. I think crop insurance is mandatory on almost every farm these days but the way that things are done in America is such that the government helps minimize premiums. One South Dakota farmer suggested some farmers “are farming the program with the intent of making an insurance claim rather than harvesting a crop.” Countries who are under economic pressure have reduced or eliminated subsidies (i.e. Sudan) for their agriculture industries while Egypt recently has considered increasing the minimum price paid to wheat farmers to spur production and aid inventories there.

Speaking of stocks, we recently got Statistics Canada’s estimate for Canada’s stocks of principal field crops as of July 31. The big take away from the data was supplies are down across the board from the same time last year. This obviously doesn’t mean prices should skyrocket because there are differences in production numbers from last year but it does mean demand for Canadian grain is there. Specifically, total wheat stocks fell 14.8 per cent from the same time last year to 5.1 million tonnes (five-year average is 5.5 million tonnes) while canola stocks fell 14 per cent year over year to 608,100 tonnes, significantly lower than the seasonal average of 1.5 million tonnes. In the pulses, lentils, dry field peas, and chickpeas stocks were seen down 65 per cent, down 41 per cent, and up 391 per cent respectively.

Finally, while the crop is coming off, producers are already thinking about winter wheat planting intentions. Some new varieties available to producers, such as AC Flourish, are moving well but some changes to insurance coverage in Manitoba mean lower payouts for failed winter wheat crops. Nonetheless, some good rains in southern Alberta have likely increased interest in winter wheat seeding as the crop will need a good soak to offset the near-perfect harvesting conditions we’ve seen over the past two weeks or so. Getting a seed test is never a bad idea though as it’ll help point out a few things that could ultimately take your margin higher.

Brennan Turner is originally from Foam Lake, Sask., 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 Farm-Lead.com, a risk-free, transparent online grain marketplace. 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

Pair arrested in Ponoka with several weapons, face 98 charges

Two men nabbed after early morning suspicious vehicle reported, stolen weapons found

UPDATE: 18-year-old Rimbey teen dies in collision

A portion of Highway 53 west of Rimbey is down to one lane while crews investigate

Ponoka County approves $70,000 to dredge Parkland Beach

Parkland Beach to see some dredging support from Ponoka County

Ponoka sets bylaw on cannabis retail, pushes for quick public consumption regulation

Town passes first reading on retail outlet bylaw, questions staff on need to separate public usage

Ponoka airport leaseholders to see second straight increase

Rates set to rise by 2.5 per cent when the calendar flips to 2019

U.S. congressman issues dire warning to Canada’s NAFTA team: time is running out

Canadian Foreign Affairs Minister Chrystia Freeland is expected to resume talks with the U.S.

Mistaken identity: Missing dog claimed in Moose Jaw belongs to another family

Brennen Duncan was reunited with a white Kuvasz that was found in Saskatchewan

Potential replacements for Phoenix pay system to start testing soon: Brison

Testing of prototypes to replace troubled federal pay system will begin within weeks

Nanaimo’s Tilray Inc. briefly the world’s largest cannabis company

The company, only listed in the US, nearly reached $300 in afternoon trading on Wednesday

Woman who helped kidnap Elizabeth Smart released from prison

Smart was 14 years old when she was snatched from her Salt Lake City home in 2002 by street preacher Brian David Mitchell

New York books editor out after backlash over Jian Ghomeshi essay

Ian Buruma, who was appointed as editor of the New York Review of Books in late 2017, no longer works for the publication

Competition tribunal to hear B.C.-based case on airline food starting in October

The competition commissioner argued Vancouver airport authority had exploited its market position

Seek compromise with U.S. on cannabis at border, lawyers urge Ottawa

U.S. Customs and Border Protection agency sent tremors through Canada’s burgeoning cannabis sector

Most Read