Delayed seeding is a problem in Canada and the United States this
spring.
While it looks like prairie farmers may be able to start seeding in
earnest this week, more heavy rain in the American Midwest last weekend
has analysts speculating on reduced corn acreage because it won’t dry
out in time to avoid maturity problems in fall.
The cool, damp weather has been a factor behind rising corn futures
prices. At the beginning of this month, the nearby May corn Chicago
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contract was about $1.95 US per bushel. It closed May 13 at about $2.10.
However, the flip side is that the rain has given an excellent start to
corn that can be seeded, so yields could be strong.
Flax gains
The flax market also saw strong gains last week.
The May Winnipeg contract closed May 13 at $322 per tonne, up $8 from
May 6, the day before the Statistics Canada quarterly stocks report.
Stats Can put flax stocks at a tight 452,000 tonnes as of March 31,
compared with 567,000 last year and 732,000 in 2000.
Over the last four years, an average of 315,000 tonnes disappeared
through exports and domestic consumption between March 31 and the close
of the crop year July 31.
If that holds true this year, year-end flax stocks will be a tight
150,000 tonnes, similar to 1998-99.
While the stocks situation helped boost nearby contract months, the
November contract increased by only $2.90 a tonne from the week before.
Dollar strengthens
The Canadian dollar seems firmly above 64 cents US after the economy
reported strong growth and job creation in April, again outpacing U.S.
performance.
Economists expect the Bank of Canada will raise interest rates in June
while the Federal Reserve will hold the line. This should further boost
the Canuck buck.
Scotia Capital forecasts the Canadian dollar at 64.5 cents US by the
third quarter and 64.9 cents by the fourth quarter.
Durum contract
At our deadline, the Canadian Wheat Board said it would introduce a
fixed price contract for durum. We’ll report on it next week. In the
meantime click on markets at www.producer.com for an outline.
