Spring status quo sees setbacks and success

This past week in the ag markets was characterized by the USDA world agricultural supply and demand estimates (WASDE) report

Brennan Taylor, FarmLead Breakfast Brief

This past week in the ag markets was characterized by the USDA world agricultural supply and demand estimates (WASDE) report on March 8. Truth be told, the stocks and acreage USDA report on March 28 is the more significant of the two grain market reports put out by the government agency this month. The WASDE report left things mostly unchanged domestically in the U.S. for corn and soybeans while wheat was bearish as ending stocks were raised 25 million bushels to 716 million bushels. With ending stocks unchanged for corn and soybeans at 632 million bushels and 125M bushels respectively, it’s clear that the USDA feels comfortable with the status quo this spring.

Let’s be clear on one thing though: U.S. soybean exports and crush demand has been anything but the status quo. More specifically, the USDA is suggesting the torrid pace soybeans are being used up or sold internationally will slow as South American supplies come online. However, as we’ve pointed out repeatedly in the daily FarmLead Breakfast Brief, the logistical nightmares in Brazil continue. Case in point, a few recent reports tell us it now takes nine days to get a load of the soybean crop from main-producing region Mato Grosso to ports in the southeast (it was six days just two years ago). The reasons for this include the shortage of trucks, the doubling of freight costs, and rail options being more expensive in terms of time and money.

From a global perspective, oilseed production is expected to increase slightly this year, according to the USDA report on Friday. This bodes well for China, which wants their soybeans and they want them now (think Veruca Salt from the older film version of Willy Wonka and the Chocolate Factory). The Asian supernation has crushing capacity for 136 million tonnes but only did about 61 million tonnes last year, meaning they quickly could become the largest producer of soymeal in Southeast Asia (a market responsible for about 20 per cent of global soymeal trade). With higher worldwide production of soybeans and a record canola crop of 15.5 million tonnes being predicted by the Canadian government, fall 2013 contracts are trading at $2+ per bushel discounts to the current front-month lots.

As for wheat, both ABARES (the Aussie version of the USDA) and the UN’s Food & Agriculture Organization expect worldwide production to increase by more than 4.3 per cent this year. However, as Kansas State University “wheat expert” Jim Shroyer points out, it’s been so dry for so long that in places such as western Kansas, it would take eight feet of snow to bring soil conditions back to normal. From a macro perspective, lower production out of the US could potentially push more foreign buyers to competing lands where production is solid (i.e. Australia, Russia, Europe, and the True North strong and free…that’s Canada if you don’t know your anthem).

Keeping it close to home, a lot of areas within the Canadian Prairies have received more snowfall than normal. That’s great for snowmobiling and all but it could potentially push a lot of seeding intentions back a couple weeks, let alone days, due to a wet landscape (post-thaw). All in all, it’s that time of year to bring out the rubber boots again and it may be for more than a few weeks.

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 FarmLead.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).

Just Posted

This year’s infield acts at the Ponoka Stampede

Niki Flundra, CrAsh Cooper return, hoop dancing added

Splash Park work has “minor rain delay”

The recent downpours may mean the work on the Splash Park will… Continue reading

Motorcyclist airlifted by STARS after collision

Incident under investigation by Ponoka RCMP

Swimming, biking and running to victory

PSC student complete triathlon race

PHOTO: Calnash roof underway

Work has begun on the covered connection between the barn and main arena

10 facts about Father’s Day

Did you know that the special day for dads was first celebrated in 1910?

No business case for Trans Mountain expansion, says former environment minister

Cabinet is expected to announce its decision on the expansion of the Alberta-to-B.C. pipeline by Tuesday

Alberta Mountie found not guilty of dangerous driving causing pedestrian’s death

RCMP Const. Michelle Phillips also found not guilty of dangerous driving causing bodily harm

Three Albertans land ‘monster’ sturgeon in B.C.’s Fraser River

For angler who landed the exceptionally large sturgeon it was an ‘incredible dream come true’

Toronto Raptors and their diverse team celebrated worldwide

Team is made up of players from the U.S., Canada, Cameroon, the Republic of Congo, and Spain

Further murder charge laid after alleged targeted hits in two Alberta cities

Jimmy Truong, who is 27, has been charged with first-degree murder in the shooting of Louie Angelo Mojica

Stettler County denial of Paradise Shores permit upheld by SDAB

Developers refusal to provide needed information among reasons behind appeal decision

Pot edibles, topicals and extracts to hit shelves no earlier than mid-December: Ottawa

Health Canada wrapped its public consultation on the draft rules for cannabis products in February

We the North: Delirious fans celebrate as Raptors win NBA title

Supporters from all over Canada cheer Toronto’s triumph

Most Read