Important Dates – Click Here For Report Release Schedule

Market Overview

• Markets volatile throughout the week.  After skyrocketing to start the week, the tone turned lower on Wednesday following reversal in Russian sentiment towards the grain deal.
  • Western Canadian wheat and canola markets were the most affected by the news from Russia breaking over the weekend.
    • Russia cancelled its participation in the grain export corridor it has with the Ukraine on Saturday.  Markets jumped higher in the Sunday evening trade on these events.
    • Grains continued thier trajectory higher Monday and Tuesday before loosing majority of its steam into Wednesday after Russia announced it would play fair in the grain corridor once again.
    • Producers were rewarded on Monday and Tuesday in the wheat and canola markets, getting targets picked up throughout the trading sessions, helping catch up on sales.
    • This goes back to the old marketing adage, “Buy the Rumour, Sell the Fact”.
    • Markets may lose their ability to react with such volatility on new news out of Russia.
    • It also raises the question of if Russia will pull out of the Grain Corridor deal on November 19th.  Russia has just as much incentive to continue with the corridor as it has a massive wheat crop to move out of its nation as well.
• 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.
• US corn harvest is 76% complete, Soybeans are 88% complete.
• 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.
  • Statistics Canada does not release its official harvest numbers until December 2nd. A month away.
• When it comes to marketing your grain, keep in mind that we need to move a significantly larger crop than last year through our Canadian crush, rail and port systems. Rail issues may arise mid winter (as they often do) and crushers can (already are) book up for the months you desire.  Ensure you have the proper movement opportunities for when it comes to your grain.
• (Most recent data available) CN set a weekly grain shipping record for the week of October 16th, moving 806,000 tonnes, 50,000 tonnes over the record.
• CP put out impressive numbers as well, moving 757,000 tonnes in the week of October 16th.  Highest weekly total in over 2 years an second highest tonnage CP has ever shipped.
• Through week 12, 9.01 mmt of grain has been exported through Canadian ports. Up from 8.09 mmt for the same time last year.
  • Although the year over year numbers can be deceiving due to last years drought and small crop that coincided with it.
  • Two years ago at the same time (2020) we had moved a whopping 12.2 mmt and in 2019 we had moved 9.7 mmt.
• Cost of capital is increasing for western Canadian producers.
  • Bank of Canada bumped rates once again 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)
• September inflation figures, released in the October report came in at 6.9%
• Local grain prices mixed for the 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.
• Market talk of a few trains of Corn making their way into southern Alberta could put pressure on feed barley values in the coming weeks.
• 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.
• Harvest nearly wrapped up in Western Canada with the exception of a few pockets in Manitoba
  • Manitoba harvest reported as mostly complete
    • 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 completed
    • Canola yield expected 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 completed
  • 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

$9.53 / Bushel – Up $0.08 USD / Bushel Past Five Trading Days 

• Wheats massive market movement this week in all three contracts was directly upon implications of the news breaking from Russia and Ukraine.
• Wheat was prone to loosing its ground after Russia announced it would play fair in the Grain Corridor agreement.
• Wheat headlines from around the globe:
  • Argentina suffering from drought yet again. 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.

Fall 2022                            UNITED STATES                         Fall 2021

Special Crop

• US mustard crop expected to have came in much larger than last year, reducing import requirements.
• 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.
• Canadian flax unable to compete on price compared to Russian or Kazakh crop. Some $22 plus bids out there.
• Flax prices into Euro regions remain subdued and limiting Canadian crop markets
• Sask Ag reporting durum yields at 30 bpa.  Statistics Canada at 36 bpa.

CANOLA

$892.00 / Metric Tonne – Up $27.90 / Tonne – Past 5 Trading Days

Canola this week followed up wheat on news of Russian and Ukrainian escalation of tensions.  Markets also climbed higher on the fact that Russia destroyed a Sunflower oil trading facility last week responsible for 20% of the worlds trade.  Veg oils in general also received a boost from palm oil markets, which are trading lower this morning but were higher on harvest concerns with less available labour in palm regions.

Canola prices have found their way into the upper third of the $800 range that was at risk just a month ago. Canola is trading at 3 month highs and producers have found that $20 marks as a place to make their next sales.  Lots of canola was sold this week into those figures.

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%

Next rate hike is expected December 7th

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

Weather – WPC 5-7 Days Forecast

Canadian Soil Moisture