Bullish feed wheat prices continue again this week. The obvious reason being the lack of precipitation. These dry, warm, windy conditions have propelled prices in which we haven’t seen for quiet some time. We’ve seen feed pricing in that $6.00 – $6.30/bu FOB farm to $7.25 delivered with the latter close to feedlot alley. So, if you are looking to part with your feed give us a call and we’ll find you the best price. Old crop hard red milling wheat is lingering around that $7.00 – $7.05/bu delivered with a 13.5 protein for July/Aug movement. As well, durum seems to have some life with $7.50/bu FOB farm triggering on old crop, while new crop hovers around $7.00. New crop feed wheat prices range in that $5.00 – $5.20/bu FOB farm. A little less remarkable is the pricing on new crop milling wheat. Should new crop pricing perk up, we’ll be sure to spread the word. Overall, should our dry weather and the States excessive moisture issues continue, ultimately pushing corn acres out, we may see these prices creep up.
Flax markets remain fairly aggressive this week with prices up to $14.50/bu picked up in the yard. However, new crop lags with flax supplies expected to increase in the 2019/20 season. The US flax crop will also be larger, which means Canadian exports headed south will be flat to lower. Chinese demand has fallen off slightly as well. All of this will weigh on flax bids, which is why new crop values have not been increasing. The old crop program is likely close to being filled, and then we will start seeing prices converge to those new crop prices. If the province has some decent rainfall, it is not too late to provide relief for the flax crop, however, Canadian crop conditions are the wild card.
Oat markets are strong for another week. Dry weather seen across much of the Prairies and tight supply seems to be keeping this market propped up. Prices have shifted another gear and continue to trend upwards. On milling quality Oats, there is a possibility to get $4.05 delivered into Manitoba with $3.25-$3.50 FOB farm not an unrealistic in the southeast. Depending on where your farm is, picked up bids will vary, but targets are a great play in this strong market. Feed oats, range from $2.75/bu to $3.00/bu FOB the farm, depending on your location. On new crop milling oats are still indicated at $3.25 to $3.50 /bu delivered for further out movement. Perhaps if we get wide spread showers, we may see these prices drop, but for now this market continues to be a bright spot.
Canola is up a little on Wednesday as it follows a big push by soybeans to start the day. One would think with this dry weather and poor looking canola crops, we would start to show an uptick in the futures price, but at this point we have not seen much reaction. Current canola bids are around the $9.75/bu mark delivered to plant plus or minus a little depending on the basis level. July futures are currently priced at $458/MT. Fall pricing is a little weaker as the basis levels are quite a bit worse for new crop at this juncture, but we are guessing that those should get stronger based on crop conditions. The scattered showers that have moved through the west this week obviously won’t hurt the crop, but how much help they are bringing is yet to be seen. Between drought, late frost and flea beetles the canola crop has faced a lot of issues this year, so we will see how this plays out in coming weeks.
Saskatchewan pea conditions are showing a lack of rain and, as per Sask Ag, only 49% of the crop was rated good to excellent. The majority of the province is waiting for a rain to roll through, but there have been sections in the eastern prairies that have seen moisture. Yield forecasts aren’t reduced just yet for peas, but the next week or two is crunch time and will depend heavily on rains come through. Looking overseas, India hasn’t removed any of the import barriers for peas, but India does seem to be lacking in moisture as well with the monsoon delayed as per Stat reports. For grain pricing, yellow peas are trading at $7.00/bu delivered and new crop at $6.50/bu FOB. Green peas haven’t fluctuated much since last week and are still trading at $11.50/bu FOB for old crop and $8.00/bu FOB on new crop.
New crop chickpeas contracts had a slight gain this week. Bids on #2 quality come in at $0.26/lb FOB farm with an AOG depending on location. The same cannot be said for old crop as their value drops a penny to $0.24/lb FOB farm. While it feels like there is a scramble in the current market as we wait for rain, it is not affecting the chickpeas markets congruently. Thoughts behind this are; acres did not fall as expected for the coming harvest and we are still seeing ample supply on farm. Year to date exports thus far are 84.8k MTS vs 713.k MTS in 2017, which also supports a stall in the market. It is hard to say what it will take to improve values as we move forward through the crop year, so we sit and wait. Feed values hover at $0.13-0.14/lb FOB farm and desi chickpeas remain a grey area. Desi new crop is a point of conversation on both the buy and sell side, with neither party knowing where to price it. India is a major factor in the Desi market value and we will continue this holding pattern until either the grower decides on a trigger value or the commercial market gets a hit on a sale price.
Soybean traders are trying to get a handle on US farmer planting intentions. Farmers are weighing the soybean return based on potential returns and an ever-shrinking planting window. Uncertainty often drives markets and as such, soybean futures are up 20 cents thus far today. Yesterday’s USDA report provided no change to 2019 production but increased new crop carryout inventories. For now, US corn will drive most North American commodity markets until the June USDA planted acreage report is released near the end of June. Local soybean bids are trading in the range of $10.00/bu picked up on farm. New crop #2 faba bean bids continue to hover near $7.50 – $8.00/bu delivered plant.
Mustard markets are flat again this week. Everyone in the trade is watching closely, as reports of heavy flea beetles and drought cause concerns in oilseeds. Rain hopefully develops later this week as forecast models now indicate some scattered rain for the next few days. New crop bids stay the same, with indications on full crop year yellow mustard at 35 cents/lb, brown 29 cents/lb, oriental (Forge/Vulcan) 26 cents/lb, oriental (cutlass) 25 cents/lb. Spot yellow mustard remains at a stable 35 cents/lb FOB farm on a #1 quality. Brown mustard holds firm with bids ranging from 28-30 cents and the latter definitely attainable in most cases. Oriental continues to lag behind grower expectations at 25 cents picked up for Forge/Vulcan variety, while Cutlass carries a 2-cent discount. Some grower targets have been able to catch a quicker delivery period at above mentioned prices. New crop contracts contain full act of God and are picked up on farm.
Interesting numbers on lentil exports being reported by Statistics Canada this week. 1.467 million tonnes of lentils have shipped as of April 30, 2019. That is just over a 26% increase from last year. You heard right, a 26% increase on a year where India has a 33% tariff on lentils and Turkey reduces imports. Doesn’t make much sense, or does it? The bigger picture gives us a better idea of what is going on. 2017-18 held our lowest export value in the last 3 years, so seeing increases this year isn’t a total shock. We are still well behind (600,000 MT) the 3-year average. The increase to India may be explained by their higher priced pigeon peas, which means lentils are being used as a cheaper substitute. Another likely scenario is India did not have as good as crop as expected. Finally, although exports to Turkey are down, we have seen other countries picking up import numbers and make up that difference. It seems everyone has been under the assumption that little product has moved but based on these numbers that doesn’t seem to be the case. This year we have seen a lot more competition on the buy side of lentils especially with more line companies getting into the game. This could be the reason why there is the misconception that not much for lentils have moved. The most encouraging news out of these numbers is that India is slowly getting back in the game and other countries have come to the table to purchase. Weather remains the markets biggest concern right now. Western Canada remains dry, India’s monsoons remain delayed and Australia also experiences weather concerns. This may bring stronger pricing, but for now reds trade at 18.5-19c/lb, large greens at 22c/lb with indications of trading higher, medium greens at 15c/lb USD and small greens at 18c/lb for #1 quality FOB farm.
The canaryseed market is showing signs of strength as we continue to see drought in some key growing areas. Exports this crop year are on pace for around 158,000 MT, which would be the highest export totals for Canada since 2014-2015. This combined with current crop ratings at only 11% good compared to 55% last year, shows why we may be seeing some more strength in the coming months. For now, old crop has traded as high as $0.235/lb picked up on farm for quick movement. New crop has bumped slightly to as high as $0.22/lb picked up on farm with an Act of God clause depending on movement preference.
Feed barley is strong this week, riding on coat tails of drought conditions here and dwindling corn acres in the US. With corn acres significantly down in the states due to flooding, prices creep higher and in turn, support barley markets. Barley acres are up here in Canada, but without rain over the past few weeks, crops are looking grim and are in need of a drink. Barley supply on farm is virtually nothing as last year was also dry, so feed got bought up quickly. There is rain in the forecast for the weekend and we hope to see that come through. A significant wide spread rain event seems to be the main focus of growers. Today prices are around $5-5.25/bu FOB farm, better bids as you go west. New crop is also available around $4.20/bu FOB farm DDC, depending on freight area. If you are looking for the 30bpa act of god clause, you’re likely forfeiting $0.20/bu.
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