Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: On a day when corn sales to China is garnering the bulk of the headlines, Canadian barley exports continue to chug along at record levels. For the week ending on May 16th, exports of barley dropped to 19,700 tonnes, which brought the total bulk exports to 3.56 million tonnes. This is merely 1.6 million tonnes ahead of last year with 11 weeks left in the marketing year. There will be additional barley exports in the coming weeks as Vancouver stocks are were 105,200 at the end of the week and Prince Rupert is currently loading a boat of barley this week. All of the destinations are most likely China. Given the strong demand from China for feedgrains export demand for barley will be extremely strong.

The Bad: A record yield from the Kansas crop tour pushed HRW futures down eight cents per bushel to close at US$6.25 per bushel. The nearby July corn contract is currently trading at US$6.645 per bushel. If you were a feedlot in Kansas what would you do? With the futures spread between July Kansas City wheat and Chicago corn at minus 39.50 per bushel, the answer is obviously FEED WHEAT. Especially since China has bought over one million tonnes a day every day this week the most economic path is to maximize wheat feeding. The HRW crop is likely to be low protein which will even further tilt the field to feeding wheat for the first two quarters of the wheat marketing year.

The Ugly: July canola futures continue to move near the limit in each trading session and today was the turn for moving down C$30 per tonne to close at C$903.20 per tonne. This contract will hit first notice date in close to a month, so there is plenty of volatility left in the coming four weeks. This is not a contract that you should be speculating in if you want to sleep at night. That it is why it is nicknamed the casino contract.