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Important Dates – Click Here For Report Release Schedule

Market Overview

USDA WASDE REPORT was released yesterday:
- Report considered to be relatively quiet
- Global wheat stock estimates came in a bit higher than estimates, taking some wind out of the sails regarding the wheat outlook.
- Much of the increase in wheat was due to larger Australian wheat crop, but a large chunk of this crop will not make milling quality due to flooding issues. So take numbers with a grain of salt.
- US export demand was left untouched from last report.
- See updated figures in section below
Next Saturday (November 19th) is the expiration date for the Ukraine – Russian grain corridor agreement. If no objections are made, it is set to renew on the date into late winter of 2023.
- Markets leaning towards its renewal for right now. Russia showed its hand last week when it put on a tough stance against the corridor, before agreeing to participate in it once again just a few short days later.
- Take advantage of any spikes in futures prices leading up to this date if undersold on commodities, particularly referencing wheat.
As for western Canadian markets. Some elevators picking up $12.00 HRSW targets throughout the week. $20.00 canola opportunities at crushers. Crusher space fills up each day. If needing movement or more cash before year end, work prudently to move more grain. Delivery windows are filling up depending on commodity and location.
According to the USDA FAS, Canadian wheat is about middle of the pack in terms of global pricing at $389/tonne. US wheat FOB pricing came in the most expensive globally at $433 per tonne, Russian wheat the cheapest at $320 per tonne.
- Mexico and Brazil purchased Russian wheat last week. Signaling that the almighty dollar holds power over everything in commodity markets. Nations need access to affordable food. Mexico is typically the largest buyer of US wheat.
Rail movement is keeping a decent pace so far. Canadian National and Canadian Pacific railways both set grain movement records in October.
- Markets have not seen major rail movement problems for a few years now, although last year we did have minimal grain to move.
Statistics Canada out on December 2nd with its 2022 harvest size estimates for the recently harvested crop.
Recent rainfall and snow precipitation across the prairies was welcomed by producers. See map below for precipitation map.
Despite the recent precipitation, it was not considered to be drought breaking. Most areas of North America are in drought status. Much of Saskatchewan and Alberta are in the classification of drought. The exception lies within some regions of south eastern Saskatchewan and into Southern Manitoba.
Massive portion of the US Midwest is now in drought classification as well due to the taps turning off in recent months. As of Mid October, there was only one drier time (2012) in data dating back to the year 2000.
United States winter wheat crop is in its worst condition ever recorded. The crop is heading into winter dormancy period in colder climates. The crop is listed as 28% Good to Excellent conditions. Last year it was 45%, which was not considered a fantastic rating either.
Growing season is over for most crops in North America but the markets will be keeping a close eye on winter precipitation and how this may all shake out. Many regions of the Canadian prairies were in a similar level of drought last year but significantly large amounts of spring moisture got the crop off to a good start.
In its October report, The United States Department of Agriculture has estimated the Canadian canola crop at 19.5 mmt. Which would be on the high side of most private analyst estimates. Most trade estimates have came in the 18.5 to 19.5mmt mark.
- USDA estimating a 8 mmt export number and a 10.5 mmt crush. The crush if realized would be running crushers at near full capacity. 10.5 to 11.0 mmt is full crush capability right now but capacity will expand drastically in the coming years as planned new crushers and expansions begin to come online.
Cost of capital is increasing for western Canadian producers.
- Bank of Canada bumped rates on October 26th by half a percent or 50 basis points.
- US Federal Reserve increased its borrowing rate by 0.75% on November 2nd
- Canada Now sitting at a 3.5% rise in interest rate hikes year, we are likely to see one more before the year is over on December 7th. US Federal reserve also signaled more rate hikes through December and into 2023
- Many business loans are over 7% and upwards of 8% in many instances now. Prime rate at banks is just shy of 6%.
- Work with your advisor as to solutions to help reduce costs of borrowing. The increased interest rates affects operating lines as well including cash advances through the Advance Payment Program (CCGA)
United States inflation dropped unexpectedly year over year in its latest monthly data released today. Inflation came in at 7.7% vs 8.2% last month and the expectation of 8%.
Local grain prices largely flat week over week:
- Oats picking up some ground for later winter, Some bids over $5.00 February onwards, depending upon location and cropping practices (Glyphosate Free)
- Canola still provided many $20.00 plus opportunities throughout the week.
- Red Lentils 35 cents
- Feed Barley still holding around the $8.00 mark for now at some locations.
60,000 tonnes total of US corn has made its way into Canada through the first thirteen weeks of the crop year. This is up from 13,900 tonnes same week last year.
Logistics remains a mess with many brokers and end users concerned about the availability of trucks. This is more so the case for feed grains in western Canada as lots of the product ends up being custom trucked.
2022 Harvest Highlights – Western Canada
- Manitoba harvest summary:
  - Manitoba reported nearly 1 million acres went unseeded this spring due to the flooding
  - Some regions had rainfalls 300% of normal for the month of May
  - Some regions of Manitoba hit 25 inches of rain, the lowest rainfall region of Manitoba had 10 inches.
- Alberta harvest summary
  - Canola yield at 38.2 bpa
  - Oats at 95 bpa
  - Barley at 75 bpa
  - Spring wheat 53 bpa
  - Peas at 44 bpa
- Alberta reporting total crop size is about 5% larger than the 10 year average
Saskatchewan crop harvest summary
- Canola yield estimated at 35 bpa provincially.
- Flax 24 bpa
- Peas 34 bpa
- HRSW 43 bpa
- Durum 30 bpa
- Barley 32 bpa
- Oats 89 bpa
Check out the Recommendation tab for all current grain marketing recommendations.

Canola 3 Month Chart

Spring Wheat 3 Month Chart

Spring Wheat

$9.52 / Bushel – Down $0.03 USD / Bushel Past Five Trading Days

Canadian wheat prices stabilizing. $12.00 January onwards HRSW opportunities exist.
Wheat headlines from around the globe:
- Argentina drought devastating wheat crops. Set to put out the smallest crop in 7 years. 40% smaller than last years crop size.
- Argentina also considering restrictions on exports of wheat to ensure sufficient domestic supplies.
- Ukraine winter wheat planting set to fall by 40% as well due to major issues with planting a crop during war.
- US winter wheat producers planting into tremendously dry soils. The driest September on record stateside. Many producers scrapped winter wheat planting plans already and hoping for a recharge of soil moisture in the spring.
- Over 320 million acres of cropland in the United States are experiencing some sort of drought.
- Wheat markets have been mostly trading headlines from the ongoing Russia / Ukraine tensions.
- Canada and United States had a fairly decent sized wheat crop. The concern is for next year due to the lack of moisture available.
Statistics Canada expecting a big wheat crop of 26 mmt, up by half a million tonne since July estimate. More on December 2nd update

Fall 2022 UNITED STATES Fall 2021

Special Crop

US mustard crop expected to have came in much larger than last year, reducing import requirements.
EU imports of Canadian mustard lower for the crop year. Higher volumes coming from Russia and Ukraine.
Argentine export pace of Canary seed remain robust
Canadian mustard supplies up year over year, hesitant selling from producers is keeping product from the marketplace and keeping bids supported.
The combination of Australian and Canadian red lentil crop size will be third largest on record.
- This is using reported figures. Canadian red lentil crop size still a partial unknown at the time
- Aussie lentil crop could come in large but there is reports that due to the recent heavy rains in some regions, there is vegetative growth being favored over pod set.
Late season Monsoon rains helping entice Indian Rabi crop acre plantings.
Prices sliding for Indian Peas and Desi Chickpeas for the season. Could discourage additional acreage of the crops this year. Yield prospects up on decent growing conditions.
Canadian flax unable to compete on price compared to Russian or Kazakh crop. Some $22 plus bids out there. Russia and Kazakhstan are dominating the market.
Flax prices into Euro regions remain subdued and limiting Canadian crop markets

CANOLA

$897.50 / Metric Tonne – Down $0.90 / Tonne – Past 5 Trading Days

Canola floating around even for the week. Touching the elusive $900 mark. Futures are now trading off the January as the November contract is now off the board for the year.

Canola prices have found their way into the upper third of the $800 range that was at risk just over a month ago. Canola is trading at 3 month highs and producers have found that $20 mark as a place to make their next sales. Lots of canola was sold these past two weeks near the $20.00 level.

Canola crushers remain the predominant purchaser of Canola in many locations. Very strong crush margins are keeping crushers at an advantage being able to source what they need by keeping bids slightly higher. This does have some stipulations although such as month and region. Some areas of prairies remain without access to crush facilities.

Some crush facilities delivery months are filling up into mid winter.

Below is a illustration of potential production figures (Red) and historical production (green). The three red bars illustrate what production would look like with a 38, 40 and 42 bpa national yield average on estimated seeded acres. 42 would be a national record, not expected to be reached at this point.

Statistics Canada put out their estimate at 19.1 mmt earlier in September

5 year calculated average for 2020 and prior is 39.4 bushels per acre

Canadian Pacific and Canadian National Railways Movements – Ag Transportation Coalition

CANADIAN DOLLAR

The Bank of Canada increased overnight borrowing rates for interest rates in the October announcement. Interest rates jumped by a full half of a percentage point to come in and sit at 3.75%