Batter-up

For the last 3-4 weeks, grain prices have been moving lower.

By Brennan Turner

For the last 3-4 weeks, grain prices have been moving lower. At beginning of this week, new weather models suggested to the market that scorching heat would hit the U.S. Midwest the last two weeks of July (albeit not record heat). The 90-100-degree temperatures forecasted in the long term has reiterated the “La Nina is coming!” declarations by the bulls, but rain is failing in these areas ahead of the heatwave, likely alleviating some of the incoming stress. Also, the U.S.D.A. is still rating 76 per cent of U.S. corn good-to-excellent and 71 per cent of soybeans as G/E (the best since 1999). All things being equal, even with some heat, the crop today looks like it’s about to swing for the fences.

Our call here at FarmLead since spring has been that while we don’t doubt that La Nina is making its way into the game, just that it won’t have a massive impact on the North American crop potential this year. More specifically, the N.O.A.A. dropped their expectations of a fall/winter La Nina to 55 per cent-60 per cent (from 75 per cent last month) and the latest forecasts from the International Research Institute for Climate and Society are expecting a weak event by early August or September. Accordingly, we continue to think South American crops are likely the first to feel pain from The Girl and that the 2017/18 North American crop could possibly be impacted a bit.

Yes, in Western Canada, the wet weather has put a damper on crop potential in Western Canada, but quality effects are still uncertain. Given the speed of crop development this year, most fungicide spraying were likely done before the rains came, but that doesn’t help lentils or peas standing in water for more than 2 days. For those thinking about grade and protein spreads for wheat starting to widen, it’s just too early to bet your grain marketing plan on that. More specifically, unless it rains like it did in the first half of June during the end of August / early September, we won’t 2014-like variances (anyone calling for $20/bushel durum like they did that year should use history as a lesson).

On durum specifically, European farmers are selling as quality is coming in better than expected with 2/3s of the crop harvested. Sure, the North American crop isn’t in the bin yet, but just like the market is removing more weather risk the closer we get to harvest, you need to think about swinging your bat effectively hitting a few singles, instead of trying to swing for the fence and hoping for a home run. With the hectic nature of harvest time, things to keep in mind for the next 18 months of grain marketing include:

1. Take swings at singles when you can (making sales in block increments of 10-20 per cent);

2. Know the quality of your bat (know what’s in your bins);

3. Know the tendencies of the pitcher on the mound (what are your cashlow needs going to be at specific points over the next 6-18 months); and

4. Be realistic and understand that you may strike out (meaning the market is more than likely NOT going to hit the price that you’re “hoping” for).

To growth,

Brennan Turner

President & CEO | FarmLead.com

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) that has moved almost 300,000 MT in the last 2.5 years. His weekly column is a summary of his free, daily market note, theFarmLead.

 

Just Posted

Wolf Creek Schools raises Treaty 6 flag for first time

Chiefs, school officials took part in a ceremony that is aimed at acknowledging Treaty 6 land

Federal and provincial governments partner in investing in Valley View Manor

Government officials take part in grand opening of Valley View Manor

Valley View Manor hosts grand opening

Rimbey’s beautiful new facility celebrated

The characters between the lines

Remembering newspaper greats!

Live bear cam: Let the fishing begin

Watch bears in Alaska’s Katmai National Park catch their dinner live.

128 Flags of Remembrance now flying in Sylvan Lake until Nov. 12

Centennial Park boasts 128 Canadian flags to honour 128,000 Canadians killed and missing in action.

Trudeau urges leaders to follow Nelson Mandela’s example at UN tribute

Peace summit in New York marks 100th birthday of former South African president

Senate seats filled in B.C., Saskatchewan

Canada’s newest senators are the first woman to lead the RCMP and a Cree Metis businessman

Newfoundland’s popular ‘merb’ys’ calendar is back

The calendar of burly, bearded mermen posing against scenic backdrops for charity returns

Suspect in Wetaskiwin trunk kidnapping arrested

Ponoka RCMP seek arrest warrants for suspects of armed robbery as well

Yowza! Twerk, emoji and facepalm are added to Scrabble dictionary, OK?

Merriam-Webster has announced 300 new words have been added to the spelling game

Man attempts to stop fight in Wetaskiwin, gets stabbed: RCMP

Wetaskiwin RCMP looking for two suspects involved in assault with a weapon

Cities make power play for new fiscal order with eye to 2019 federal election

Trudeau ordered Champagne to talk with provinces and territories about ways to “address the timeliness of the flow of funds” to projects.

Most Read