Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: There were a lot of good things in the market today, but the move in spring wheat was particularly impressive. Spring wheat futures settled up 30 to 31 cents per bushel with the September contract closing at US$7.2175 per bushel. The jump came from a limit move higher in the corn market which saw limit gains of 25 cents per bushel. The increase in the spring wheat markets pushed wheat prices in the western areas of the Prairies over C$9.00 per bushel in old crop positions and eastern areas over the C$8.50 per bushel mark. The spread between spring and winter wheats widened today with winter wheat futures in Chicago and Kansas City moving up 37 to 38 cents per bushel. Although the drought is in spring wheat areas and a premium should be building for the Minneapolis wheat contracts, one should not quibble with the gain with spring wheat.

The Bad: Durum cash markets have dropped significantly below spring wheat offers today. The durum market seems to be stuck in place after the latest Algerian tender. This was likely the last big durum tender before the arrival of new crop. Durum new crop bids are now C$0.35 to C$1.00 per bushel below spring wheat. Durum buyers better pay close attention to new crop bids as growers have plenty of options for the intended durum acreage. The feed market would also not be too bashful in picking up new crop durum if problems develop with the corn or barley crops in North America. Oh by the way, the durum areas in the U.S. and Canada are the driest of any crop grown in the Northern Plains or Prairies. The severe drought category (in North Dakota and Montana) covers more than half the U.S. durum growing region.

The Ugly: The Biden administration floated a trial balloon this afternoon as they proposed an increase in the capital gains tax from 20 per cent to 39.6 per cent for individuals with an income over one million dollars. The market like the news and the S&P 500 closed today at 4134.98 points, which was down 38.44 points on the day (0.92 per cent). If you look at a one year chart, the tax tantrum is barley distinguishable in the nearly 1400 point rally over the past year. Personally, I’m still waiting for the year that I have income more than a million dollar. The only thing I’m certain of is that year will never come without my lucky six numbers being hit in the lottery.