Important Dates – Click Here For Report Release Schedule

Market Overview

• United States markets closed today for US Thanksgiving holiday. US markets reopen Friday for shorter trading hours.
• 93% of all western Canadian HRSW graded as either a #1 or #2 wheat this year.
  • 79.3% hit the #1 slot, 13.6% hit the #2 slot.  1.6% came in as a #3 and the remainder was taken up by lower quality. (Grains Canada)
• Of the #1 wheat, market average is sitting at 14% protein and the #2 is averaging 13.6%. The top two varieties grown this year were AAC Brandon and AAC Viewfield.
• Ukraine and Russia grain export corridor now open until mid March.
• It has been a lower week in western Canadian markets.
  • Canola has taken the brunt of the hit, loosing about a dollar per bushel over the past week.
  • Canola has been hit hard by technical selling and the funds have sent the commodity lower.
• Wheat markets also slightly lower but faring much better than the canola, Spring wheat trading down $0.10 per bushel but buyers aggressiveness on targets has appeared to waned slightly for the week.
• North American grain futures also weak in recent trading sessions due to no compromise in the stalemate between railways and unions in the looming rail strike date of December 9th.  These looming strike dates affect the largest US rail unions and would effectively shut down a majority of US rail cargo traffic.
• Statistics Canada out on December 2nd with its 2022 harvest size estimates for the recently harvested crop.
• 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.
  • Russia is moving its wheat globally as it has the lowest price for the near term.  Buyers are skeptical to go to far out with Russian wheat due to political instability.
  • Brazil, Mexico, and Egypt all bought some Russian wheat in the past week.
• 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.
• Much of Saskatchewan and Alberta are in the classification of drought as winter is upon us. The exception lies within some regions of south eastern Saskatchewan and into Southern Manitoba.
  • Producers will be in need of good snowpack but will be looking more for spring precipitation to recharge soil moisture conditions.
• 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.
• Cost of capital has increased for western Canadian producers.
  • 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 near 7% 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)
• Canadian most recent inflation came in at 6.9%, unchanged month over month.
• Local grain prices largely flat week over week:
  • Oats picking up some ground for later winter, Some generic bids over $5.00 February onwards, depending upon location. Some glyphosate free oats trading $5.75 into southern Manitoba.
  • Canola still provided many $20.00 plus opportunities throughout the week.
  • Red Lentils 35 cents
  • Feed Barley bids jumping all over, many locations have lowered their bids below $8.00 in Central Saskatchewan.  Bids improve into Alberta, over $9.00 in some spots.
  • Corn is making its way into Canada and feeders are looking at what route to head with feed needs into winter.
• 62,000 tonnes total of US corn has made its way into Canada through the first fifteen weeks of the crop year. This is up from 26,000 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 $0.10 USD / Bushel Past Five Trading Days 

• Markets waiting to see what Statistics Canada releases for a wheat figure next Friday.
• Canadian wheat prices lost some ground this week.  $12.00 opportunities available in very select areas. Most about $0.50 below that depending upon region.
• Wheat headlines from around the globe:
  • Russian and Ukrainian grain will continue to ship unencumbered through mid March due to the safe passage corridor extension.
  • 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 fell 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.
  • 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

• Canadian Durum quality comes in very nice. 82% grading as either a #1 or a #2
  • 62% as a #1 and 20% as a #2
  • #1 came in at 14.3% protein and #2 came in as 15% protein.
• Russia becomes the worlds largest pea producer, taking away the title from Canada
• 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

$812.50 / Metric Tonne – Down $34.50 / Tonne – Past 5 Trading Days

Canola futures down for the week. Significant fund selling has taken canola away from the $900 per tonne level in a short period of time.  We are sitting around $30 per tonne over harvest lows seen in early September.

Crush margins remain strong and have every incentive to run a full crush program for the year but we need to remember that the crushers can do max 10.5 mmt, maybe push it to 11mmt.  We need to find a home for the remainder of the crop. 2 million tonnes of crop has been exported, about the same as last year (Drought Year). The year prior we sent 3.7 mmt out the door already by week 15.

Canadian canola, leading into this selloff was about $100 to $150 per tonne more expensive than Australian canola FOB ports.  This selloff in Canadian values would bring us closer to parity. Australia has the freight advantage into Asia and is taking off what is expected to be a large crop, although they do face significant water issues.

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. We will see their new estimate next week.

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%

Next rate hike is expected December 7th.  Recent inflation numbers of 6.9% point to a likely rate hike again at the December meeting.

Prime rate at most national banks sit near 5.95% now.

Weather – WPC 5-7 Days Forecast

Canadian Soil Moisture