It’s summers like this one that reveal just how puny the prairie crop is as part of the overall North American crop of major crops.
Prices for the major crops – wheat, barley, canola – have been rotten recently, as if a giant crop is scheduled to arrive next month in farmers’ bins. That could be true if optimal weather hits each and every day from now until the end of September, but that isn’t what most folks think is going to happen. So why are prices so uninspiring? The answer, as every one of you knows, is that Canadian prairie crops are just a small bump on the backside of the giant crops that grow in the U.S. Midwest and Great Plains. Problems up here can have a big impact on price of micro crops like lentils, dry beans and flax that we grow here and they don’t grow much of down there, but the big fat crops have to stand or fall with American crop prospects and unfortunately this year great growing conditions through most of the summer so far in the U.S. Midwest and Great Plains have been creating the prospects for a really big and good crop. Everyone’s waiting for the USDA report tomorrow that will give much better detail on what farmers think is actually out there in their fields.
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In a reverse of this year’s weather, when Canadian growing conditions are great and American ones are bad, we get the benefit of getting good prices for a big crop that is priced as if it’s just a small crop. In years like this we’re suffering because a few million fewer tonnes of barley up here is easily met by livestock feeders by corn brought up from down there. Big soybean crops alleviate worries about canola quality and quantity. Even spring wheat – a prairie juggernaut – can have problems here that are eased out of the minds of the market by good conditions in the Dakotas. A three-times daily crop markets newsletter I receive details wheat prices at the open, midmorning and at the close and talks a lot about U.S. spring wheat crop conditions. Scarcely mentions Canadian conditions, even though we’re the dominant producer. There’s enough down south of the border that the market generally feels safe ignoring our situation up here.
So let’s hope there are some nice surprises in tomorrow’s USDA report. Something to remove the complacency in the market. Because right now there’s no reason for anyone to be scared of running short of wheat, barley, canola, etc. When the markets aren’t scared about supplies, they don’t bid much for crops.
