We had our first taste of frost in Canada and the United States last week.
Our story on this page explains the market’s reaction to the event.
The frost risk will hang over producers for several more weeks until this year’s late crops are harvested.
Given the summer we’ve had it is hard to believe, but Environment Canada is forecasting slightly warmer than normal temperatures for all of Canada Aug. 16-Sept. 15. But that doesn’t rule out another frost.
The U.S. National Weather Service Climate Prediction Center is less optimistic.
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The deputy chief economist of Farm Credit Canada says 92 per cent of Canada’s total exports to the U.S. went into the country duty-free in June.
It forecasts cooler and wetter than normal conditions for U.S. corn and soybean areas in September where, like in Canada, many crops are behind normal development.
The forecast is most certain for the heart of soybean country in Iowa.
The forecast map also shows the slightly cooler than normal area extending into southern Manitoba.
Western North Dakota and Montana are forecast to have normal September weather and presumably that means Saskatchewan and Alberta too.
If this forecast is true, and there are problems in the U.S. harvest, it could drive up grain and oilseed prices.
The U.S. Department of Agriculture has forecast a record corn crop and near record soybean production.
But forecasted demand is also strong and it wouldn’t take that much frost damage to change the mindset of futures traders from one of surplus to a more price-optimistic supply-demand situation.
But while the frost threat will be a significant market factor, the flip side of the coin is that big crops are expected in most areas of the world, keeping a lid on prices.
Another piece of news last week was negative for feeds and oilseeds.
Avian flu continues to flare up in Asia, most recently in Malaysia, prompting large slaughters of poultry, closing its poultry exports and reducing domestic consumption.
And China reported for the first time that it found an avian flu strain in pigs last year, raising worries that the disease could mutate and become more dangerous to humans.
All this is going to keep Asia’s livestock industries on edge and may weaken demand for corn and soy meal.
To view the long range temperature outlook map for Canada, go to www.producer.com and type “Canadian forecast” into the go box. To get the American forecast, type “U.S. forecast” into the go box.
