Play the game in front of you

On Wednesday, June 11, 2014, we got the June installment of the U.S.D.A.’s W.A.S.D.E. report and boy, was it a stinker.

On Wednesday, June 11, 2014, we got the June installment of the U.S.D.A.’s W.A.S.D.E. report and boy, was it a stinker. As in everyone left the ice (err, trading floor and screens) and didn’t want to play anymore because there was barely anything changed from the May report a month previous. One of the numbers poured over the most was the old crop soybean carryout, which ended up getting downgraded slightly (but as expected) to 125 million bushels, which, at 3.7 per cent, is the lowest stocks-to-use ratio since records started being kept in the 1960s. Alas, we’re almost done the old crop marketing year so what’s new crop doing? Truthfully, it’s not music to your bank account’s ears at this point. The U.S.D.A.’s world production estimates for the 2014/15 marketing year all rose which, in turn, raised ending stocks for the 14/15 season. The one bull that seems to still be in the neighbourhood is the risk of an El Nino hitting Australia’s wheat and canola crops and, further north, the pulse and vegetable oilseed fields in Southeast Asia. That being said, more reports are surfacing that the weather event will be just moderate and that losses won’t be too significant – AKA it could take a few percentage points off of total output, but not half the crop. Accordingly, you have the play the game that’s in front of you, not the one you hope will get put on the field (or ice or whatever playing surface you relate to best).

Spanning the rest of the world, China has suspended imports of U.S. DDGs feedstock grains as more than a few shipments included traces of the unapproved Syngenta corn variety, MIR 162. Unsurprisingly, this comes on the heels of April owning the record for the largest amount of DDG import by the People’s Republic in one month. On the flipside, soybean crush margins in China are starting to improve so cue the boats from South America to get rolling again. Speaking of which, Brazil’s wheat crop is being forecasted as bigger than initially expected, joining the E.U., the Black Sea…the list goes on.

However, on a bit of a positive note, according to the Port of Thunder Bay, they had their busiest month in 16 years in May, moving 1.3M tonnes of grain, more than a 90 per cent increase over the five-year average. While C.N. boasted about its ability to move 5,500 cars per week in May, 38 per cent more than the previous record, I’m still hearing many producer car orders/obligations are not being fulfilled by the railroads. Adding to the woes is the Canadian Association of Petroleum Producers who recently forecasted oil movement by rail in Western Canada to more than triple in the next two years as the industry’s options remain idled by pipeline regulatory approval and construction. Ultimately, Canada is a resource nation and I can guarantee you that the next two years won’t be pretty as industry groups, private companies, and the government will all be scrambling to get on and secure their portion of the playing surface (AKA infrastructure). Make sure you know your position(s) on the field too – due diligence and pregame planning can pay off.

To growth,

Brennan Turner


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, a risk-free, transparent online and now mobile grain marketplace (app available for iOS and Android). His weekly column is a summary of his free, daily market note, the FarmLead Breakfast Brief. He can be reached via email ( or phone (1-855-332-7653).