Some very positive and widespread rains in South America recently have kept soybeans suppressed despite very positive sustained domestic and export demand. Before the rains, crops were already in relatively decent shape so the additional shot of moisture will just add to the crop’s development. Conversely, cooler weather is a concern for the northern hemisphere, including Ukraine where producers have planted more winter wheat, than initially thought, putting in 16.06 million acres (four per cent more than initial estimates). Next door, the Russian Ag Ministry recently said that the country has exported 2.1 million tonnes of grains thru the first three weeks of November, including 1.48 million tonnes of wheat and 400,000 tonnes of barley. Despite grain movement still strong from Mother Russia, the slump in energy prices and Western economic sanctions are hurting the country significantly at a cost of up to $140 billion per year. That being said, it might be time for Russia to re-consider this Cold War-like self-sufficient attitude or otherwise the country is headed for a recession. If they remain the same, it’s likely that the economy will continue to suffer and specifically for the agricultural producers, make it hard to stay in business.
A few weeks ago, I wrote about the likelihood that European Union rapeseed production numbers will be much lower in 2015/16 than this year’s record crop thanks to a pesticide ban. However, recent reports have suggest that U.K. winter rapeseed acres have dropped by 10 per cent from last year down to 1.53 million acres, not the 4 percent drop initially suggested. The increase has been mostly blamed on market prices and rotation reasons as winter cereals acreage looks to be up 6.5 per cent year-over-year to 4.82 million acres. This sentiment is echoed relatively well across the E.U. though and ultimately, I think the pesticide ban continues to be a major issue that the market hasn’t completely considered yet. Back home, the most recent data from the Canadian Oilseed Processors Association shows that total canola crushed so far in 2014/15 is up nine per cent versus this time last year with 2.15 million tonnes crushed. This in mind, crush capacity utilization is still only running at about 81 per cent.
Recently I gave the keynote speech at the Emerging Agriculture Hackathon put on by the University of Saskatchewan Junior Chamber of Commerce (for the record, a hackathon is where various players in an industry combine forces with developers/programmers to hash out new, innovative, and helpful ideas. It is NOT an event where hackers break into other systems for fun!). I talked a little bit about being an Ag-Tech entrepreneur and why it’s more important than ever to creative when it comes to agricultural production and sustainability. I also spoke on the importance of education and communication being an important focus as the spread between marketed “common knowledge” and science-based facts continues to seemingly widen. As a leader in production, Western Canada also needs to be a leader in the conversation about the industry, so it’s important to support various organizations (i.e. Ag More Than Ever) but also having an individual voice can be a significant addition.
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 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 (firstname.lastname@example.org) or phone (1-855-332-7653).