There is a big story in Canada’s grain sector that nobody is talking about this year, says MarketsFarm analyst Bruce Burnett.
“This may go down on record as one of the best quality crops that we’ve seen in western Canadian history,” he said during a recent Farm Forum Event presentation.
It is the opposite scenario of last year, when grain companies had a lot of low quality grains, oilseeds and pulses to move.
“We don’t have those types of problems this year,” said Burnett.
Daryl Beswitherick, program manager of national inspection standards with the Canadian Grain Commission, doesn’t know if he’d go as far as Burnett did.
“It’s a really good crop,” he said.
“To say it’s exceptional and the best in the history of Western Canada, I’m not sure. But it’s getting close. It’s up there.”
Sixty percent of the hard red spring wheat crop made the top grade. That’s good but not as good as 2018 when 75 percent was No. 1.
The protein level averaged 13.4 percent versus the 10-year average of 13.5 percent.
Beswitherick said the malting barley quality is fantastic and there is more No. 1 canola than usual. Pulse and durum quality is similar to other years.
He said the last thing the grain industry needed at the end of a tumultuous 2020 was a difficult crop. Anything that can minimize stress is a good thing these days.
Wade Sobkowich, executive director of the Western Grain Elevator Association, said it is a relief when there is a top-notch crop to move.
Grain companies typically put sales on the books about nine months prior to harvest and those contracts contain minimum quality specifications.
“It means you have an easier time meeting those specifications,” he said.
“It definitely makes it less complicated.”
In years of poor quality, a grain company may have to move a vessel off berth to wait for a specific train to arrive with the quality attributes needed to meet the contractual specifications.
“You’re not going to have to be quite as surgical in that regard,” said Sobkowich.
Farmers also reap some rewards in that they won’t be penalized for shortcomings, such as a low falling number used to evaluate sprout damage in wheat. It was a bone of contention last year.
Sobkowich said there are no premiums for exceeding quality specifications, but there are discounts for falling short.
In general, customers want grain companies to meet their specifications. Delivering a higher quality crop than specified can screw up their recipes.
Burnett said while the quality of this year’s crop was a pleasant surprise, the production was a disappointment.
Yields ranged from average to below average depending on the commodity, which is disheartening given the bumper crop analysts were forecasting in August.
Conditions for next year’s crop are mixed heading into winter. Subsoil moisture levels in much of Saskatchewan and Manitoba are “very dry,” especially in southeastern and south-central Saskatchewan.
The opposite scenario exits in central and northern Alberta, where the biggest concern is excess moisture next spring.
Burnett forecasts a cold winter for the entire Prairie region due to a La Nina weather event that will push the polar jet stream farther north than usual, forcing Arctic air south.
There is a chance for higher-than-normal precipitation in the northern Prairies, which won’t help the excessive soil moisture conditions in central and northern Alberta.
La Nina will likely lead to dry conditions in an area of the U.S. ranging from Arizona to the southern Plains.
Oklahoma and Texas have received some rain but Kansas is still very dry and it produces two to three times as much hard red winter wheat as the other two combined.
Rainfall has been light and soils are dry in southern Russia, the Volga region and Krasnodar.
So there are some concerns about winter wheat production in the Northern Hemisphere.
Production will also be down in Argentina, where recent rains have helped crops in the south but not in the northern areas of the wheat growing region.
Weather conditions have been improving in Brazil, where soybean planting is behind normal. The late start will delay harvest and potentially hamper planting of the country’s second crop of corn.