Glacier FarmMedia COVID-19 & the Farm



The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: The quarterly results for CN Rail were not great as freight volumes and revenues dropped. The interesting part of the financial statements  is that grain volumes at CN increased by 10 per cent to 8.15 million tonnes. This is a record volume for the third quarter. The question for most farmers is can this performance continue through the remainder of the year. One has to assume that freight volumes will recover as the economy improves, but that is likely to be more a story for the first half of 2021. This should mean that we have at least two more quarterly reports from the railways outlining their exceptional performance for grain movement. Meanwhile the stock continues to move to record highs after the meltdown in March.

The Bad: Corn markets moved down another nickel today as good crop conditions and the prospects for exceptional yields continue to pound the market. Unless we can find a weather threat soon, the corn market is destined to test the contract lows set in June. The brief rally caused by the reduction in acreage has been short lived with yield and production the primary concern for the market. This is not great news for the feed grain market in North America. One of the bright spots is that barley export demand remains strong. If demand from China continues into the next crop year the best home for barley may be the export market. Domestic prices unfortunately will be anchored by corn values.

The Ugly: The U.S. dollar index is headed for the March lows and is technically weak. The slow recovery of the U.S. economy due to the high number of cases of COVID19 is pushing the U.S. dollar lower. This is not all bad news – the lower greenback means that commodity prices (priced in US$) will see some support. Unfortunately this also means that the Canadian dollar will remain relatively strong. The loonie closed at 74.35 U.S. cents in trading action today.