A rising tide is supposed to raise all the ships, but some grain prices have increased a lot more than others. Wheat, durum and barley price expectations took a major jump yesterday in the CWB’s newest Pool Return Outlook. Top quality spring wheat is up by nearly $1.50 a bushel. The price expectation for No. 1 CWRS with 13.5 per cent protein is now an average of nearly $6 a bushel net Saskatchewan. The PRO on top quality durum saw an increase of just over a dollar a bushel. No. 1 durum with 13 per cent protein now has a PRO of just over $5 a bushel. Malting barley is up by a dollar a bushel and now sits at $4.13 net Saskatchewan. Cereal prices still pale in comparison to canola, which has been around $10 a bushel and flax which is quoted at around $13. Price quotes approaching 30 cents a pound are now being seen for top quality large green lentils. Crops that you’d have to rate as disappointing include peas, mustard and canaryseed. Yellow pea prices remain under $5.50 a bushel, yellow mustard is only about 24 cents a pound and canaryseed is struggling to hit 20 cents. While some crop prices are in the upper range of historical bids, others are certainly not.
I’m Kevin Hursh.
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Tags: agricultural products, agricultural services, barley, Canaryseed, cereal, crop protection, custom application, CWB, CWRS, durum, Dynagra, fertilizers, financial solutions, grain prices, large green lentils, malting barley, Pool Return Outlook, precision agronomics, PRO, soil fertility, Variable Rate Technology, wheat, yellow mustard
The top nine of ’09 has a nice ring, but the big agricultural events of the year actually fall into just five broad categories. In agriculture, weather is usually a big story and it certainly was in ’09. The Saskatchewan crop had more lives than an alley cat. Despite drought, delayed maturity, the threat of frost and an extremely late harvest, the crop was above average overall and absolutely stellar in some regions. The flip side of the equation and number two on the list is the big drop in grain prices, particularly on the cereals. After record high prices in ’08, many crops have dropped back to disappointing levels. There are still some profitable crops, particularly lentils and canola, but the year ahead is uncertain. Profitability will likely depend on growing the right crops and having an astute marketing plan. The number 3 story of the year is the crop export barriers that have emerged. Europe has restricted our flax and China has restricted our canola exports. Even a visit by our Prime Minister wasn’t enough to change Chinese policy. Which commodity will be the next to run into a trade barrier? I’ll talk about number 4 and number 5 on the list on tomorrow’s commentary. I’m Kevin Hursh.
Tags: agriculture, Canola, cereals, delayed maturity, drought, export barriers, flax, frost, grain prices, late harvest, lentils, marketing plan, trade barrier, Weather
The price slide in Canadian Wheat Board grains has halted in the latest Pool Return Outlook. In fact, wheat values are up by $1 to $10 a tonne and feed barley values are up by $7 a tonne. Durum and malting barley are unchanged from last month. No. 1 spring wheat with 14.5 per cent protein is up by $8 a tonne, while No. 1 with 13.5 protein is up by $4 a tonne. Wheat with 12.5 protein is up only $3, so the protein spreads have increased. The average Saskatchewan price of 12.5 wheat is expected to be $4.78 a bushel. Spring wheat with 13.5 protein is pegged at $5.19 a bushel – a protein premium of 41 cents. The expected price of wheat with 14.5 per cent protein is 5.79 a bushel, which is 60 cents a bushel for that one per cent of protein. In comparison, the protein premiums in durum are much smaller. The PRO on No. 1 durum with 13 per cent protein is $4.40 a bushel. No. 1 durum with 14.5 per cent protein is only $4.70 a bushel. That’s only 30 cents for 1.5 per cent protein. The $7 a tonne increase in feed barley is not going to be enough to attract much into the export market. The PRO is only $1.87 a bushel. Even though the domestic feed barley price has dropped, it’s still a lot higher than the PRO. I’m Kevin Hursh.
Tags: Canadian Wheat Board, grain prices, Pool Return Outlook
There can be a tremendous variation in grain prices from one buyer to another. Late last week I was checking out canaryseed prices. I’d heard that prices had improved to the 20 cent a pound range. While I did talk to a company paying 20 cents, I also talked to another than was still at 17. That three cents a pound or $1.50 per bushel is a big difference. Greg Kostal of Kostal Ag Consulting out of Winnipeg has been reporting a big and sudden price increase in yellow peas. Kostal says prices around $6 a bushel are available and I’ve seen other reports confirming that increase. However, you’ll still see prices listed that are only $4.50 to $5 a bushel, so not all buyers have upped the value. Mustard is another crop with a big price discrepancy. There are websites listing mustard prices of only around 15 cents a pound. However, the major mustard buyers have been paying significantly more. Quoting exact prices can be difficult because of freight differences and quality considerations. However, it pays to shop around and to keep your ear to the ground. It can take a lot of time to keep on top of markets. That’s why an increasing number of producers subscribe to one or more market newsletters. I’m Kevin Hursh.
Tags: Canaryseed, grain prices, Mustard
There’s a website now providing a lot of information on grain prices. The Alberta Canola Producers Commission has added a new feature on its website that provides daily grain prices as well as links to various futures markets. The cash prices quoted are for various regions within Alberta, and that’s useful for anyone marketing feed barley into feedlot alley. There are also cash quotes for canola, peas, flax, feed wheat and oats. The prices come from a number of buyers in each region, so you’re not just getting the price quote from one company. There’s also a weekly feed grain report you can subscribe to. Through the links to futures prices, you have access to charts that track prices and volumes. Various market analysts provide newsletters to which you can subscribe and there’s valuable price information and analysis, but it’s good to take advantage of information that’s free. The Alberta Canola Producers Commission, like its counterparts in the other provinces, is funded by producers. To my knowledge no commission or organization in Saskatchewan is providing a similar service. To check out the information being compiled in Alberta, just Google Alberta Canola Producers Commission. I’m Kevin Hursh.
Tags: Alberta Canola Producers Commission, grain prices
Politics has had a huge impact on grain prices this fall. First, anti-hoarding measures introduced in India caused a flood of field peas onto the market. That dropped pea prices as well as Canadian exports and both are yet to recover. Then Europe reported finding an unapproved GMO flax variety in flax shipments from Canada. That situation is hopefully working its way towards a resolution, but in the meantime the European market has been closed to Canadian flax and prices have taken a hit. There were also GMO concerns in mustard, but that was trace amounts of an approved canola trait, so the disruption seems to be minimal. The latest problem comes from China. For some reason, they’ve decided to ban any canola that tests positive for blackleg. There has always been some blackleg fungus in canola and it’s never been a problem before. Officials are trying to sort through the issue, but China is saying that it won’t take accept any canola with Blackleg after November 15 That caused a sharp dip in canola prices late last week. Another ongoing problem for canola is that the United States is stopping some canola meal shipments due to presence of salmonella. Without a market for the meal, some crushing plants have reduced their crush. Rather than just supply and demand, it’s supply, demand and politics determining our prices this fall. I’m Kevin Hursh.
Tags: blackleg, Canola, flax, GMO, grain prices, supply and demand
October has been good for a lot of grain prices. Minneapolis spring wheat futures have gone from $4.75 a bushel to nearly $5.50. December oats were below $2 a bushel and now they’re around $2.50. December corn futures have been rising since the last week of September. They’ve gone from around $3.15 a bushel to over $3.75. November soybeans have rallied from below $9 a bushel to around $10. Of course, the value of the Canadian dollar has been on a tear in October, largely due to a sagging American greenback. This has mitigated any grain price rally on this side of the border. Still, there’s been an uptick in November canola futures. They’ve gone from below $370 a tonne to around $390. Some analysts say that any upside potential is limited and producers should watch for pricing opportunities. Others believe the economic recovery is going to continue to drive all commodity prices upwards. As usual, economists and analysts don’t really know what’s going to happen next, but stock markets around the world have been showing a lot of strength. I’m Kevin Hursh.
Tags: Canadian Dollar, economy, grain prices
It gives me no pleasure to talk about the drop in grain prices that we’ve seen in the past few months. However, I’m surprised by the amount of denial there is. I run into lots of producers who believe this is a short term blip – just harvest pressure. They don’t accept that the bull market of the past couple years is over, or at the very least taking a break. Outside of agriculture, many people don’t realize how far a lot of prices have dropped. No one can predict the future with certainty, but the grain market is facing new realities. The stocks to use ratio is significantly higher on all the major grains. Production is again outpacing consumption. The price drop has been general across all grains, oilseeds and specialty crops. When prices are going up, everything tends to get swept along to one degree or another. The same thing happens when the trend is down. It’s hard for any commodity to buck the trend. Markets may not go much lower, but there’s a growing consensus that a substantial upturn is unlikely any time soon. The consensus could be wrong. Maybe prices will defy the odds and zoom back up, but I don’t think so. I think there’s a need to adjust price expectations and make decisions accordingly. I’m Kevin Hursh.
Tags: grain prices, markets, oilseeds
You can find market analysts who think grain prices will continue to decline and you can find analysts who think prices are going to improve. One of the optimists is Robert Winslow of Wellington West Capital Markets Inc. He released a report this week predicting that Ag Equities are poised for a strong rally as grain prices rally from the lows they have established. The report notes that since the beginning of the year, copper prices have increased 92 per cent, oil prices have increased 50 per cent, and gold prices have increased 14 per cent. Meanwhile, grain prices have dropped an average of 19 per cent. One of the few commodities doing worse that grain is natural gas which has dropped 44 per cent year to date. Winslow notes that global grain supplies have been rising, but now seem to have leveled off when expressed in days of supply. The Wellington West report also notes that most grain prices are now near to the cost of production levels for American farmers and this too should be supportive of a price bottom. There are other analysts who say we haven’t seen the bottom yet. It’s rare to see such division on the overall direction for prices. The next few months could be very interesting. I’m Kevin Hursh. For more grain prices visit www.dynagra.com
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Kevin Hursh PAg, CAC
Tags: all time low, gold, grain prices, oil
Market analysts are divided on the grain price outlook for the months ahead. Some analysts point to India and China saying their increased demand is going to be good for prices. Both countries seem to be pulling out of the recession quite nicely. According to the USDA, Chinese corn and soybean production will be down this year and China has the money to ramp up imports. India has enacted anti-hoarding measures that have caused a drop in yellow pea prices, but that should be a short-term situation and then they could be back in the market. However, some market analysts are taking a much more bearish view. David Drozd of Ag-Chieve in Manitoba has been predicting that markets will come under extreme pressure over the next few months. He says the technical factors and the fundamentals are both painting a bad picture. Drozd worries that prices will break below defined areas of support and fall lower. He says grain prices right now may be attractive compared to what prices might look like two or three months from now. So when the analysts can’t agree on where prices are going, what are producers supposed to do? Well, if you can make some sales at a profit, that’s never a bad strategy. I’m Kevin Hursh. For more grain prices visit www.dynagra.com
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Kevin Hursh, PAg CAC
Tags: China, grain prices, markets
