Glacier FarmMedia COVID-19 & the Farm

Experts

 

The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The small grains report dropped U.S. wheat production by 51 million bushels to 1.646 billion bushels. All classes of wheat were lower than the August production estimates with durum the notable exception. Durum production increased by 2 million bushels to 37 million bushels. The other spring wheat class dropped by 10 million bushels to 331 million bushels. The big surprise came in HRW wheat which came in 28 million bushels lower at 749 million bushels. The news moved wheat markets higher during the day with spring wheat nine cents per bushel on the day. The drop in spring wheat production exacerbates the shortage of high protein wheat in the U.S. This report is certainly bullish for North American wheat hard wheat (HRW and HRS) prices.

The Bad: Soybean stocks in the U.S. came in above expectations, mostly due to an increase in the 2020 production number. The USDA estimated ending stocks at 175 million bushels in the September WASDE report. The stocks report placed that estimate 81 million bushels higher at 256 million bushels. The market didn’t take the increase well and the November contract closed down 28 cents per bushel to close at US$12.56 per bushel.  This in turn pressured canola futures, which closed the day marginally lower. Just one thing I would like the market to remember – these stocks levels are not particularly bearish when you compare them to previous years.

The Ugly: The Saskatchewan crop report put the harvest at 95 per cent complete at the beginning of the week, which is well ahead of the five and ten year averages of 70 and 75 per cent, respectively. There is a downside to the good news from the harvest front and that is that September was drier than normal for all areas of the Prairies with the exception of parts of northwestern Alberta. The bulk of the growing areas in Alberta, Saskatchewan and Manitoba received less than 40 per cent of normal. With the bulk of the growing season over, most areas of the Prairies are reporting moisture deficits of 100 mm to 150 mm. The dry weather this fall has not helped with the recharge of subsoil moisture levels for the 2022 growing season.