Episode Transcript
[00:00:00] Speaker A: All right, folks, welcome into episode number 58 of the what the Futures podcast. Happy New Year. Of course, each and every episode is recorded in the UPL studio, where from 160 acres you can get in on the grower rewards program with the good folks over at upl. So hit them up for that grower rewards program. I've got a fun show here for episode 58. I have Kyle Sinclair joining me to talk about little bit of a reflection on 2024. You know, what did we, what did we learn here from a crop marketing perspective? And then also what are some of those big wins that we can highlight? We talk about 2025, not predictions per se. Kyle does throw a few predictions out there, but just about what crop has the most to gain, what crop could have the most to lose here in 2025 from a price perspective. And we talk all things marketing. We got lots of stuff on the go. We have the inauguration, January 20th, Trump taking over in the US we've got all sorts of things to talk about when it comes to markets right now. We've got demand, record exports, record crush pace on Canola. You got wheat premiums coming at you. Prices are staying the same, but we premiums out there, lots of wheat movement. So we talk about that and so much more. So hang in for the episode. I got Kyle here with with Producer Profit.
Hey folks, welcome to the what the Futures podcast, your quick guide to better farming decisions, of course. My name is Ryan. I'm the host here at what the Futures. I've spent my career working with farmers. You know, the last, I don't know, I guess it's 2025 now, so it's like 15ish years working with farmers across the prairies. I've been a great marketing advisor. I've been a grain buyer, also been an analyst as well. You could do me a favor, head over to YouTube, give us a, a like, subscribe wherever you get your podcast though. I appreciate it if you subscribe and, and give us some, some ratings, give us some comments.
It helps drive the direction of the show. And you can also go to ryand.ca and check out all the latest on, on the website. All right, folks, let's get going here for episode 58. Now I, I know this can make its way or could make its way or should make its way into positive moments. But I just, when I set out with this podcast, I decided in the summer of 23 to, to make this podcast and to, you know, get going. I didn't have, I didn't know what to do for a goal. And so I was like sitting there and I'm like, well, I think it'd be really cool if like a thousand, if we got a thousand listens on an episode. Like, again, I'm creating a podcast for farmers in Western Canada. There's only so many farmers in Western Canada and within that group there's only so many that listen to podcasts. And I was like, you know, I think a thousand would be a good goal. And I think in my mind I like, or I wrote down, like, I'd be nice to hit that by the summer of 2024. Well, I didn't, I didn't make it there. But over the holidays, the Christmas episode just went bonkers. It, it's over 1100 listens the last time I checked here a couple days ago. And when I looked at the stats I, I was, I was a little bit surprised because I wasn't expecting that number. The podcast has been trending higher. So thank you very much for tuning in and sharing it with your friends and neighbors. But yeah, we did it. And then we blew past it by 10% as well, which, which is great. So I just, I want to thank you for, for tuning in every week and for listening and for sharing this with, with those in the farming community in Western Canada. And you know, I only had one goal. It wasn't even a well thought out goal, but when I saw the number, it did, you know, make me pause for a minute and be like, oh cool. Like, yeah, I guess we did it. So thank you so much for, for tuning in. A thousand listens. I know, well, I got a long ways to go here to match Joe Rogan, but you know, it's cool for me and yeah, it was a pleasant surprise starting 2025 here with that and I'm excited to see what we can do here over the next 12 months as well. So thank you for the thousand listens and thanks for tuning in. All right, folks, just a couple of add ons here. Actually, one thing I want to talk about briefly and then I also want to remind, remind everybody, you know, if you're at the conference, you're listening to the podcast. If you're at the conference, we are doing a little bit of an afterparty here. January 14, 8:30am Mountain, that's going to be on Zoom.
But don't forget about that. It's in your email and if you need that link, you'll see it there. We're going to do the afterparty. Drumheller was a Great conference and we're going to do a little check in to see how you're doing with your crop marketing here in 2025. There's going to be other announcements with this, but u, I thought we could keep, keep the fun going, keep the momentum going. I also want to just mention here 2025, I'm, I'm excited about 2025 and you know, January is a time of year where you can get a lot of planning done. You can get a lot of, you know, more office time stuff done. I, I would say compared to other times of the year. I, I also notice over the holidays some fantastic job ads. Farmers posting on, on farmer platforms, you know, looking for help for the growing season. And some of these ads and these notifications, they're top notch. They're, they're beautifully done. Okay. But I also, I just want to remind everybody here that you know, if you're going to attract talent and I know it's habit to throw it into farming forums and, and stuff like that but don't forget about the people outside of those forums as well that aren't members of some of those forums. So I'm talking about, you know, my friends over at Ag Careers now if you use the code futures you can save a little bit of money and post some jobs through, through there. I was actually chatting with egg careers back in December and yeah, they, they were saying how, how some listeners were, were taking advantage of the savings. I think it's 150 bucks to, to put your ad up with them. But you know, as for, you know, for me as a, you know, as when I was starting out I spent a lot of time on egg careers and I was looking for a chemical job. I was going to be a chem rep. Right that was my job when I was in university. I'm like I'm going to get a new truck and be a chem rep. No, not good at anything related to growing a plant. Did try to do some chem stuff was not my thing. Not good for me. Ended up in crop marketing. But again I, I see some beautiful ads out there. I know you want to post those in, in the farming groups, on Facebook and stuff like that. But don't forget there is a crop of young people out there, college kids even, you know, some of these high school kids coming out. There's some great operators and, and help graduate in grade 12 here this year. That again, I don't know if they're on egg careers but give yourself a better shot with that job. Posting so again, our code is futures eggcareers.com.
all right, folks, let's welcome in Kyle Sinclair with producer profit in episode 58. Kyle, it's been a minute, man. It's been a minute. How. How's. How's the holiday season for it? Did you do anything exciting?
What'd you get up to?
[00:08:05] Speaker B: Yeah, no, it was. It was good. We obviously a little bit warmer during the Christmas stretch and then colder during New Year's stretch, so, you know, a little bit more ice skating, that sort of stuff. And then once we got to the New Year's piece, then it was a lot more sitting inside watching movies and maybe binge watching some. Some shows. So the nice part was maybe taking the foot off the gas and ignoring the markets a little bit. We still kind of kept an eye on it, but almost have those holidays in the middle of the weeks. It interrupted the trade and. And kind of made it not really reliable enough to bother tracking, if that makes sense. Right.
[00:08:42] Speaker A: No, I get it. Yeah, for sure.
[00:08:44] Speaker B: A little pause. So that was always nice.
[00:08:47] Speaker A: So your. Your youngest. How old your youngest?
[00:08:52] Speaker B: Thirteen.
[00:08:52] Speaker A: Thirteen. Okay. So Santa is not.
[00:08:56] Speaker B: They've kind of figured that part out. I mean, I can play the game, but for you, it's much more of a mystery.
[00:09:02] Speaker A: Yeah.
[00:09:02] Speaker B: My kids are like, yeah, tell Santa I want this. And it's like, thanks. Yeah, at least pretend. Come on, guys.
[00:09:10] Speaker A: Yeah, yeah, yeah. We. We had a nice Christmas as well. Of course, the weather being nice, we got outside too, which is. Which is always appreciated with little kids to get outside. But we. Or, sorry, Santa brought two Play Doh scooters.
[00:09:30] Speaker B: Okay.
[00:09:30] Speaker A: So Mrs. Claus and. And. And Mr. Claus had a debate, and Santa did not want to buy duplicate presents. Why would we buy the same thing? This is insane.
[00:09:46] Speaker B: Yeah.
[00:09:47] Speaker A: And why would Santa do this? This is a sorcery. Yep. Kyle, it was the best thing.
[00:09:53] Speaker B: We could talk.
[00:09:57] Speaker A: We. They had those things all day. They scooted around with them. They did their Play DOH pizza delivery. There was no fighting. It was like. I looked at Mrs. Claus, I was like, all right, well done.
[00:10:09] Speaker B: Well, well done.
[00:10:09] Speaker A: I don't think we'll get racetracked too often, but. Yeah.
[00:10:13] Speaker B: A racetrack inside the house.
[00:10:14] Speaker A: Yeah, it was a little intense, and I ate a lot of Play DOH pizza, but. Yeah, I didn't put on that much weight during the holidays, so I guess it was all right.
[00:10:23] Speaker B: That's good. Yeah, exactly. Salt intake a bit higher.
[00:10:28] Speaker A: Yeah, a little. Just to touch you. We.
Chantel wanted. For Christmas, she wanted a robot vacuum. All right.
[00:10:36] Speaker B: Okay.
[00:10:38] Speaker A: I think Robot vacuums have been over a decade, maybe longer, and we've never had one.
[00:10:43] Speaker B: Right.
[00:10:43] Speaker A: And so I was like, you sure? Like, that's all right. And I tell you, man, we set that thing up right after dinner, it takes off. The kids, they finish their dinner, they scatter, clean all their area up, because the vacuum, which they've named Debbie, is going to eat everything. So they clean up everything and then they sit on the couch and they scream at it and watch it for like half an hour. Beautiful is. It's amazing. We go up for bed and a.
[00:11:13] Speaker B: Vacuum all in one.
[00:11:14] Speaker A: Yep, yep. So it's fantastic. Yeah, it's good. It is good.
All right. So holidays happen. I'm with you, man. There was not a lot going on. I think the biggest story I had was India said, hey, we're, we're not going to put tariffs on yellow peas, Canadian yellow peas for another two months. And, you know, that was a pleasant surprise, I would say.
Yellow pea prices climbing back to the 11 and a half bushel range again. So farmers were the opportunity to clean out. But anything else stand out for you during the holidays?
[00:11:47] Speaker B: Well, it was interesting to see soybeans kind of have a bit of a pop in the market. Right. And, and honestly, oil season in general, I would say, because you have the January contract coming to an end, and typically that means that you get a bit of pressure in the market as the long positions exit or shuffle over to the March contract. And so seeing the oil canola went up and soybeans had a significant spike, some of those Argentina dryness concerns coming into the market, I think is interesting. Maybe a touch early. I'm not sure. It's something that's going to have a massive impact long term on soybean supply globally, but it could, it could maybe take the top off of that Brazilian production number that just keeps climbing. Right. I think we're north of 170 with some estimates now. So.
[00:12:32] Speaker A: Yeah, yeah, Record, record production.
[00:12:34] Speaker B: Yeah, it's always a record with Brazil.
[00:12:36] Speaker A: Yeah, it is, it is and it will be for a while yet. Like more land, you know, better technology. Better technology.
That's where it's going. So, yeah, yeah, yeah, I, I was, I, I was a little bit worried that we'd get some thin trade and Canola would sink 40 bucks a ton during the holidays, just because. And I was happy to see it find a little bit of strength.
[00:12:59] Speaker B: Yes.
[00:13:00] Speaker A: For us during the break there. So, so we come into 20, 25. Here we are before, before we get too far down the path. Though, in 2024, you know, you're doing this every day. Is there any, like, big learning opportunity as a crop marketing analyst in 2024? Like something that you're like, man, I got to remember this because, yeah, I.
[00:13:24] Speaker B: Think, you know, the interesting piece, I think for 2024 was you're coming back a little bit more to a bit of a routine ranging market. Right. And so we've had a lot of. It's been. I think I started doing this in 2015 or 2016. Right. And so. And then, you know, you get government, you get the Trump government, the first go. Then you get problems with China, you get all of that adversity. You get Covid in there.
You know, we've been through some pretty crazy market scenarios over the last six years. Yeah, right. Eight years, even, if you want to go that far. And here we are almost able to catch our breath, and now we got Trump 2.0 coming in. And maybe don't rest too much because it's going to get probably crazy here. But I think looking back at 2024, seeing the market settle back in, trying to find some ranges, and I mean, to a large degree, we sort of expected it's going to settle into some ranges. Now, for me, some of those ranges surprisingly, were lower than, than I had initially expected. Like when canola had soared higher up to a thousand dollars a ton or whatever, you know, eleven hundred dollars a ton. I, I had a lot of grower meetings before it had started to fall about, you know, it makes sense for canola to fall back down. And the previous top of the range was $550 a ton. And I'm like, normally when we settle back into a range, the old high becomes your new floor. And I remember during those conversations I was talking with growers and I was saying, it seems unrealistic to go back down to that level because you have the inflation, all of the money printing and the cost of everything had gone up. And so I was like, 650 makes sense. Like 600, 650. I could see that being your new floor.
And so, I mean, you spent most.
[00:15:19] Speaker A: Of the year there.
[00:15:21] Speaker B: It did, but it still tested that old high that we had, you know, 574 or whatever.
And so I think maybe the learning curve for myself was don't get greedy in a market.
Oftentimes I want to. Like, the intent as a, as a market analyst or an advisor with farms, is to always help them hit home runs. Right. That always feels the best. But it's, it's Worth recognizing that sometimes it's just important to get on base. Right. And not strike out. And so hitting singles and doubles, that still is great. And I think more than ever, I mean, obviously with the presentation and the stuff in Drumheller there, the constant message, I think, is those trading accounts come in quite handy.
With the uncertainty that we have in these markets, having a way to navigate some of that uncertainty becomes a huge benefit to the farm.
[00:16:20] Speaker A: Yeah, I'm, I'm with you on the trading accounts for sure, but yeah, the, the 2024, there's a few crops there that, that just looked like they had that home run potential as well. But keeping that batting average up, you know, moving that, keeping that grain flowing, keeping it moving and at profitable prices still makes sense. I, I think for me, what I learned to 2024 is. And this is one that I keep having to revisit every three years, apparently, but is that the crop? It's not made until it's in the bin. Right. And, you know, even though things look fantastic in, in June and incredible in early July, it's still a week of extreme weather or, or dry weather or whatever it is, can change things in a hurry, and Mother Nature can. Can humble you. And so I, I know for me, I, I didn't make any decisions that I'm really regretting based off that, but it's just another reminder that, you know, until it's in the bin, it's just not made. So. Yeah.
[00:17:31] Speaker B: Yeah.
[00:17:32] Speaker A: What about, what about a big win for you in 2024? Is there anything that stands out as a, as a bit of a home run play?
[00:17:40] Speaker B: It's. Well, it's kind of, it's interesting because it was a year where there were some good home runs that were available, like the wheat sales in May. I wish. It's always bittersweet, I feel. Right. Because you. There were some sales that were, were made in May on the wheat rally. I wish I had sold more. Right. And. And you have that, that regret.
We made some good yellow pea sales in the summer, which, you know. 13. Right. We were pretty aggressive with that, but.
And, and fortunately, we actually, like, that was maybe a 30 sale at the time, but a strong 30. Right. Because crop conditions, as you said, looked amazing. And so that actually turned into, like, for some of the growers that we work with, that was actually turned into 100 sold by the time harvest was done. Right. So, I mean, I guess as much as I'm sitting here saying I wish we would have sold more, it's kind of a Good thing we didn't because, I mean, you could have sourced that. Right. You could have covered that.
[00:18:39] Speaker A: You're on the right side of that market the whole time. Yeah.
[00:18:42] Speaker B: So I, I think that side was good.
Some other, you know, positives that I think that we saw as far as like reading the market was not getting too crazy with the wheat market when it did fall apart, just because, like, I remember I wrote down some of the basis levels during the rail strike or when the rail strike was looming and all of that going into the fall. And. And I think there was a 70 cent basis for hard red. Right. A bushel and. And there was panic. Right. It was a, it was a very stressful time for farms you don't have. It doesn't look like you're going to have good yields and the prices are terrible. And it was like you and I talked about that harvest rally quite a bit and we did get that to a large degree, I would say. And then it helped. Like now all of a sudden you're seeing basis levels almost $2 a bushel better.
So I think like some of the patience there. If you missed, if you missed the selling opportunity in the spring or maybe you're risk adverse or for whatever reason, we did get at least a bit of a recovery here. Not all the way back up to the best prices, but still better than the fall prices. And it's an interesting dynamic because last year was the opposite where sometimes a lot of your fall prices were the very best.
[00:19:54] Speaker A: Yeah.
[00:19:54] Speaker B: And then it just kind of got worse. And so this year, farms were actually rewarded a little bit for hanging on and being patient with the market, at least so far through the year.
[00:20:04] Speaker A: The. I've been talking about basis with the lunchbox crew here over the last couple of days, but like, people forget or I think anyways that like basis parts of Saskatchewan was. Yeah. Like 25 cents positive. Right. Like now it's a buck 75 or 2 bucks. And you know, I had a basis target hit against a futures first contract.
Futures first contracts done. Well, I don't know, what, eight months ago or something like that.
[00:20:36] Speaker B: Yeah.
[00:20:36] Speaker A: And you add that base and you're like, holy dynamite. Like, where did $10 a week come from again? But here we go. So, you know, again, I wish there were more of those out there, but basis has done a dramatic move since harvest time. That's right. And I don't know about you, man, but I was talking to some farms and, and some growers trying to sell some wheat. You got all these specials out There, everyone's trying to buy this stuff. But when you go and put some volume together and try to negotiate above the posted special, I'm not getting any luck. Like, I'm not getting any, any action out there. I got one little deal done, but, yeah, nothing. It's like, it's the posted bid. I'm like, but you're coming out with the special next week again, like, yeah.
[00:21:24] Speaker B: And I feel like there's a lot of. It stretches across the wheat market to maybe a lesser degree, but I think the Canola market has, there's so much uncertainty with the Canola market. Right. And on the wheat side, I think I'll finish the wheat thought here. But the, on the wheat side, you know, there's, there's, there's a lot of uncertainty with what our Canadian dollar is going to do based on the Trudeau resignation, Trump taking over, our tariffs, coming in, all of this stuff. And it's an absolute mess, to put it nicely.
And so that's going to have such a huge impact on what the basis does for the wheat values. I don't think, as far as an outlook goes on the wheat side, I don't think you're really going to get anything too exciting in the market until you get to sometime in April where the market starts to recover and push into Black Sea, weather concerns, that sort of thing. So I think there's a solid foundation and really good stories there for why the wheat market will rally. But it's three, four months away. And in the meantime, the buyers seem to be content with keeping hard red prices around. I mean, in Alberta here, 850 a bushel. So if the futures drop, the basis will get better.
And CPS seems to be, you know, sitting around eight to eight and a quarter. So that's, that's kind of where those, the buyers are just going to adjust their basis levels relative to the futures because that seems to secure volume. But are they, are they nerd? I think they're going to shift a little bit more of their attention to the wheat side, which is kind of something that we usually see in the marketplace as far as demand goes. But I think the real premiums and specials are going to happen closer to springtime when the market gets a little bit concerned about Black Sea and what's going on over there.
[00:23:12] Speaker A: And, you know, if, if canola exports, which have been at a tor. Pace, like, if they can continue for as long as they can continue. But you know, there's, it's, if you're going to move something through an elevator, it's going to be wheat. And then imagine the Canadian dollar just kind of keeps grinding lower.
[00:23:32] Speaker B: Yeah.
[00:23:32] Speaker A: And then you get a little action.
[00:23:36] Speaker B: Very real possibility, like with the, the Trudeau news kind of popped that loony higher.
By the end of the day, we had given back a third of the gains and now we're starting to slide back down towards. And we weren't able to break an uptrend on that.
You know, there's, there's some key technicals there as well. And, and you got Trump really ramping up the rhetoric as far as, you know, making Canada the 51st state and, you know, using economic force and all of that, like a lot of bluster.
[00:24:06] Speaker A: But are you going to use military force is what they asked them this week. He's like, economic. And I'm like, oh, wow, military. I didn't think of that.
[00:24:16] Speaker B: Yeah, going to roll tanks across the Canadian border anyway.
Yeah, I don't think it's going to come to that. And I mean, even, you know, you dive into some of the, some of the headlines about him creating, you know, declarations of emergency so that he can use tariffs and get around the, the new NAFTA deal.
I mean, even in that scenario, I think he's kind of limited to a 10 tariff, which is something that has been talked about in the market before he was even elected. Like, that was a, something that was on the radar a lot before that. And I think, you know, you tie that in, I guess we're talking more about the Canadian dollar and the possibility because you're, you're more likely not going to get any kind of new government in Canada or any kind of shake up until the springtime for sure.
Maybe late spring, early summer.
[00:25:05] Speaker A: I, something I was reading yesterday said August.
[00:25:09] Speaker B: Yeah.
[00:25:10] Speaker A: At the earliest. And then a lot of like October, which, wow, that's a long year.
[00:25:15] Speaker B: That is a long year. Especially, you know, if your government's running at half capacity or whatever. You want to use a number there. But in that scenario, I don't see the Canadian dollar gaining a lot of traction and climbing like, no, if, if he doesn't put tariffs on, I could see the Canadian dollar. It does need a bit of a price correction just as far as technicals go.
Maybe you get a 1 or 2 cent pop on the looney, but then I think it reverts back to grinding lower again and that, I don't know, by the time you get to the spring or summer, you could be looking at three dollar basis levels on hard red, at least in Alberta and you know, adjust that across the prairies as you move. Right.
[00:25:53] Speaker A: So it's like you're reading my mind today, Kyle. I, I said $3 this morning as well, so that's.
[00:25:59] Speaker B: Well, look at that.
[00:26:00] Speaker A: Yep. We're, we're in sync right now.
We're going to talk about some 20, 25, like prediction type stuff in a moment. But I was, I don't know, I read a bunch of this stuff over the last couple weeks and you know, the Canadian dollar apparently made a low of 61, 61 and change in 2002. And there's a few predictors out there saying, you know, that's the number they're aiming for on the Canadian dollar 61 cents. So. Yeah, yeah.
[00:26:29] Speaker B: Which that would certainly make dollar three very easy.
[00:26:33] Speaker A: I, I'm going to circle back. We've come a long ways from this, but I'm going to go back to it anyway. My win for 2024 from a marketing perspective is I'm gonna say, I'm gonna take the layup here and I'm gonna say Canola Marketing.
[00:26:46] Speaker B: Okay.
[00:26:46] Speaker A: And the reason I say Canola marketing is that with all the baloney out there with all the fear tactics with the drop in the market, I haven't sold a lick of canola under. Oh man, I should actually, I should have looked it up before, before recording this. But it, it must be like under 640 or 650. Like I don't think I've sold anything under that. Right. And so avoiding, but avoiding those lows, avoiding the 560, avoiding the, the 580 or whatever.
[00:27:20] Speaker B: Yeah.
[00:27:21] Speaker A: I think from, from, for me, a win, that's what I'm going to go with because I, maybe that's an easy one. Maybe everyone did the same thing, but I'm not sure. I think coming at us.
[00:27:33] Speaker B: So the market and the buyer rhetoric, I would say created a lot of panic when the market started to fall lower. Right. And so they were able, I think they were successful in pressuring farms into some decisions that obviously nobody's going to be happy with as the market continues to bounce around and give a lot of opportunities over $14 a bushel. So I do think you make a good point that sometimes, you know, a win is not getting rattled by the news and just kind of maintaining a level of focus of what the real fundamentals are.
[00:28:06] Speaker A: Yeah. When I started my career doing this back in 2011, 2012, I was with an organization where if something came out, big moves were made and it's one of my learning things from my career is not to react to a lot of this stuff and to just give it time and let it pass. Because when we were making those moves, yeah, it didn't turn out. It never did. When there was a big negative move and we took action, it just didn't work out. So I, I always let the market kind of just let it breathe a bit now, so.
[00:28:42] Speaker B: That's right.
[00:28:43] Speaker A: All right, so let's switch it to 2025. I got a couple questions for you. But, you know, as you, as you look here in January and you're looking at what's in front of us over the next couple weeks, like, what are you thinking about from a marketing perspective?
[00:29:01] Speaker B: Well, the politics is a major one. I don't think you can do anything properly or ignore that and think you're doing a good job. It's going to be, to me, it's the main focus of the market right now. All of the uncertainty that's coming with that. It's, you know, right now, you look at soybeans and it's like Argentina dryness is like a whisper compared to the, the possibility of what's going to happen on after January 20th. So, but there's no way of actually predicting what's going to happen after January 20th because Trump is, if, if nothing else, unpredictable. So on that side of it, I think we, we have to keep that in mind. But I think going forward, the big focus for me, especially on the Canola side, is going to be what is the scenario with, with our export, with our demand when it comes to Canola. Right. Whether it's canola oil or the seed exports, I think our downside is still relatively limited because even if tariffs come in, even if China does something, our spread to the European rape seed is so wide and we're so cheap globally that if the price drops, it just increases your demand to other, other ways. Right. So, yeah, I, I think that's something that. To watch as it unfolds here.
And then I think the big story will be what happens with Ukraine and the Black Sea conflict. Not that I think it's going to have an immediate impact because they're already tighter on supply. But going into the next marketing year, that could have an impact on how wheat trades. And then, of course, the major problems that are going on in Russia, particularly with their crop conditions, I think there's a chance that you're going to get some big sensitive markets on that side. So those will be, I think, the bigger catalyst, at least in the next Three to six months that could really impact pricing opportunities for farms.
[00:30:58] Speaker A: So when we look at canola, I'll give a little shout out to Oil World. Oil World. I was reading this morning they are in their estimates they have European imports of Canadian canola climbing significantly now over the next five to six months. So. All right, so that kind of lines up there and makes a lot of sense. Sure does.
I see Twitter is. Or X is is buzzing right now because we have zero dollar basis for the summer in, in Saskatchewan. We have companies pulling in their contracts early. Yeah, you know, it like the demand is. Is there. It's been the story you've been. If we go back in the archives here, I don't know what episode it would have been in the fall, but you've been harping on strong demand the entire time.
So, you know, when you, when you look at that, do you think basis continues to improve here?
Is it too hard to make that prediction based on what's coming on January 20th?
What do you think?
[00:32:02] Speaker B: I do think. Well, it's interesting. I was telling, you know, in our, in our updates that we've been putting out over the last, over the week here, you have, you know, a lot of different elevators, you know, announcing that they're triggering $14 targets on canola. Right. Which works out to like a minus 10, minus 15 basis depending on exactly when they're hitting those, those values. So if they're sitting at a minus 10 to a minus 15 basis, you know, your. What that does demonstrate to me is that we do have export demand coming. And you hit a good point with, you know, a lot of these buyers pulled contracts early. Right. Because they weren't for.
[00:32:41] Speaker A: Yeah. For months now. Like.
[00:32:42] Speaker B: Yeah, yeah. So then they're naked going forward. And if they do build any kind of an export program, they're going to have to replenish all of that stuff that they pulled early that they would have otherwise had on the book. So I do think there's a good opportunity for the basis levels to climb. There's going to be a lot of uncertainty as far as I think you got to watch your crush basis levels to see how comfortable everybody is or how certain the, the buyers are on their oil demand going into the United States.
But I mean, this week we're seeing, you know, Louis Dreyfus crushers and I think Pioneer crush in, you know, pushing out further in the eastern prairies at a zero basis. Well, if that's the scenario, then you've got, you've got pretty good, like there's Some confidence there. Other. Other buyers aren't necessarily moving to those levels, but I think, you know, when you tie in the demand that we're seeing, the pace that it's left the country, the crush pace that you have, if, if demand continues, the buyers are in a bit of a pickle to.
[00:33:43] Speaker A: Buy second smallest canola crop in the last decade. I just, you know, I just look back 10 years. So. Last decade.
[00:33:49] Speaker B: Yep.
[00:33:50] Speaker A: Record pace for exports.
[00:33:53] Speaker B: Yes.
[00:33:53] Speaker A: Record. New monthly records because we have new crush capacity coming on. So we have new records every month for crush.
It's going pretty well right now. And yeah, you know, I, I'm not seeing.
I expected to see, like, some of the crush plants and, and like, some of the industry start to talk about, you know, tariffs on canola oil and. And stuff like that and put that fear out there. And I, I haven't seen anything. The US takes 97% of our canola oil and 65% of our canola meal. Like. Yeah, but there's no. No, I don't see any concern out there at all.
[00:34:34] Speaker B: No. And I mean, I was doing some digging on just canola oil exports. When it comes to issues, whenever we run, it seems like whenever we run into issues with China as far as seed demand goes, they switch to buying more oil. So, you know, I think on that side, there's at least an out that we have, you know, looking at vessel lineups through Reuters and stuff, and, you know, going off of that data, you have a lot more variants or different countries coming in and buying canola right now. And a lot of that's just due to the spread. Like, you're sitting at $160 a ton to European futures. Yeah, that's a massive spread. Right. So the combination of that, I think, has to keep support underneath the market, or at least the. The Downside Limited.
[00:35:24] Speaker A: All right, I want to give a big shout out here to show sponsor John Deere. And I know many of you have seen this this week, but I'm excited about some of the announcements here. The autonomous tractor coming in the near future. But anyways, John Deere, if you think about it, you've got a lot of connections. Connections to family, the community, your land. Well, here's a connection you may not think about. How's the connection to your machines? You know, your tractor, your sprayer, your combine with a JDLink modem, you can easily connect them to John Deere operations center. There you can gain valuable insights into your machines, know where they are and what they're doing at any time. Monitor speed, fuel levels, even compare machine performance. If you're not already, get connected by heading over to John Deere Ca.
All right, so of course, every week I, I do some positive moments and my favorite segment each and every week. But we, obviously, we get through the, get through the end of 2024. Like, I have, you know, my first positive moment here. It kind of all rolls together, but I have little kids. Finn turns 2, actually, by the time you listen to this podcast, Finn is now 2 years old. His birthday's on January 9th, and, and Willa's just over 4. So for us, Christmas is, We're, we're fortunate, we're lucky. It's a, it's a blast right now. And I know I only have a few of these. I only have. I don't know if it's. I don't know if it's 5 or 10 or what the number is, but it's, you know, the belief is there for just a small amount of time. And so again, it's an easy one for me with Christmas just fantastic. Christmas morning coming down, you know, the excitement with the kids, the presents and, and just, even all the discussion about Santa and, and how fun that is. So the weather was great. You know, we got out, got to do some skating, got to pull the kids around on the toboggan and, and also got to unwind. We went to Jasper for a few, a few days and, you know, a devastating fire there in the summer. So that was a little, A little challenging. Chantal and I got married in Jasper back in 2010, so it's, it's close to our, our heart. And yeah, just to see the, the, the destruction from that fire was. I, I, I guess I was a little unprepared for it, but we, we met some great people, we had some great conversations, got to relax and, and also support some of those small businesses there that are just getting up and running here once again. So if you're, if you're looking for a domestic vacation, like, to get away. It's not cheap. Don't get me wrong, it's not cheap, but if you put Jasper on your, your radar, the, the folks of Jasper will appreciate it because tourism is just in, in the tank there at this time. So that's my first positive moment. My second one is that the markets just, they didn't do a lot during the holiday, so I really did get to disconnect and, and enjoy sometimes markets within volumes. They do some weird things, and yet you have to, It'll increase the stress level a little bit, but I was able to, to just shut down and really take in, take in that break. So it's nice to be back, you know. Third positive moment for me, Well, I did get rubber boots for Christmas. That's what I wanted was insulated rubber boots. And I got those. So that, that's huge. But it's also nice to be back here for 2025. I, I'm a pretty, pretty positive guy, all right, Most of the time, pretty positive guy. And I'm really, really excited about 2025.
And I'm not gonna, I'm not gonna sit here and say it's gonna be easy, it won't be easy. But for the opportunity to have positive impacts on, on farm business decisions here in 2025, I'm super excited because I, I think there's going to be some great decisions made and I feel well prepared for 2025. And I hope you're excited about it as well. I hope you have lots of positive moments here. And hey, feel free to send them my way. If you got something you want to share about your holidays, I'd love to hear it as well.
So I got a couple of, I got a couple questions for you here as well. A couple of. I did a projections episode like a year ago and I, I got my Wheaton Canola numbers were close. It was, it's a bit of a yahoo. It was a Yahoo process. Like, it just. I got lucky on those and then my luck ran out on yellow peas and green peas. Like, green peas were double what I said.
[00:40:26] Speaker B: You can't win them. All, right.
[00:40:27] Speaker A: Yeah, but, you know, double was what I said. So, so I want to steer away from, from that type of prediction because I, you know, just don't think it benefited anybody. But for those listening, I thought these would be two kind of fun ones. So when you look at the 2025 growing season, you look at where prices are today, and I've got my answers written down. I studied this for weeks before we recorded Kyle. So which crop. My first question, which crop has the most to gain in Western Canada?
[00:41:03] Speaker B: It's tough because I think we're moving back into a bit of a ranging market outside of a major weather concern. But I think, oh, man, it's not fair. You've had a few, you've got, you had time to prepare for this.
[00:41:17] Speaker A: I'm not going to go first because I could take your answer away from you, so I'm not going to go first.
[00:41:22] Speaker B: Then I can agree with you.
I like the possibility of A really good spike on wheat going into the springtime.
But I, I also think because of the reasons that you've mentioned, the record demand, the low production number on Canola, I think that market, it's not going to get out of control, but most to gain. Okay, I'm going to, I'm going to go with $9. I think you're going to see $9 to. I mean, it depends on the basis level and where the farm's located. But, you know, let's go off central Alberta prices where I am know, I think that we could easily see close to $10 value. Hard red.
[00:42:02] Speaker A: Yeah.
[00:42:02] Speaker B: And, and I think that we could see $16 plus canola. So I know you weren't trying to do predictions as far as the price goes, but those are the values that I see. Barley is like this sleeper crop right now that corn, corn refuses to die.
[00:42:20] Speaker A: The corn story has been kind of nice the last little while.
[00:42:23] Speaker B: Yeah, it has. But I don't see that market running away, so. Yeah, yeah, yeah. So that's a tough question. Nothing's, nothing's like a crazy. This is going to be an awesome year for this commodity.
[00:42:39] Speaker A: So I, I agree with you on the wheat. I wrote down wheat as well. And so I was thinking the same thing as you where we're maybe sideways pattern and seasonal trends and weather events and stuff like that. So when I look at, I'll talk about Canola actually when we're all done this, but when I looked at where the new crop prices were for wheat, well, number one, they're not giving you nearly the, the basis that you should be seeing. Right. You're, you're so, so I'm like, oh, that's an easy one. Basis improves a whack for new crop and then futures rally. And I've been as, I've been doing planning meetings with some of the farms and we've been doing budgeting, like, some of them are looking at me like, what is wrong with you? Why is your wheat budget so high? And I'm like, well, I'm just looking at currency and exports and I know everyone wants to plant more wheat, but whatever.
I actually, I think 10 wheat in Alberta's in play. And, and the reason I justify that is I go to Patterson, I take futures, multiply it by currency, take a basis, an average basis, and I'm almost at nine bucks already.
[00:43:54] Speaker B: Yeah.
[00:43:55] Speaker A: So, you know, just because the Vitara bid and the Grains Connect bid and Pioneer bid is $7, it doesn't mean that's the actual number and, you know, if you got a Patterson location around you, I don't know if they. Are they still doing futures firsts or not? I think they will if you acknowledge that you know what you're doing. But.
[00:44:16] Speaker B: Yeah, yeah, yeah.
[00:44:18] Speaker A: So we. I'm with you on the wheat. I again, you know, a fairly sideways pattern. Any, any small acre crop, though, with poor weather has a chance to do something crazy. But I looked, when I looked at oats, I'm like, no, that's not, that's, that's not the one for me. When I looked at feed barley, I was like, I like the story. I like what's going on. But yet a tariff against Canadian cattle into the U.S. sure, like, I don't know. I. That one kind of worried me on the gain side. Canola, just because of everything going on, worries me a little bit. There's just so much out there politically and.
Yeah, so let, let's go to the biggest, the, the most to lose now. So if you look at a, you know, new crop or 20, 25 crop, like, what's got the most to lose?
[00:45:08] Speaker B: I think it's got to be. It's got to be green peas.
[00:45:11] Speaker A: Okay.
[00:45:12] Speaker B: Right. I think, I think, I think I got to go with green peas on that. Just because second year in a row of, like, really strong values and it's, and it's a small market now. Maybe this is a.
Maybe I'm taken the easy way out because it is something that, you know, not a lot of farms grow and it's, it's a smaller space in the market, but it just, it doesn't take much to saturate that market. Right. If you get, if you get a bunch of farms that are like, heck. And, and I feel like farms often get caught in that as a trap where they see this year's price and they think they're going to get that for next year. And it's like you can't, you can't view it that way. And I would urge farms that if you are looking at growing green peas because you like where the price is this year, I would be fairly aggressive with forward contracting with an act of God, if you can, at decent values, because I could see that falling apart. Like, I don't necessarily think that you were last year, maybe with your January prediction where it cratered. I think that's still very much a possibility. Right.
[00:46:11] Speaker A: Yeah. I'm going to be the jerk that doesn't sell a green pea at 12 and 14 and sells them all at 8.
[00:46:18] Speaker B: It'll be this year. Exactly.
[00:46:20] Speaker A: Yeah.
[00:46:20] Speaker B: But. So, I mean, I think on that side, Greenpeace, but I think, I think it's going to be a lot more of a sideways market, outside of which, I mean, is a big ask, outside of major weather events or political situations, which. What are the odds that we don't have a political situation this year? But, yeah, there's always the possibility that it could really get rocked one way or the other. I think that, I think that, you know, we talk about weed as the shiny object here that has the potential for upside. You know, you could tie in the fact that there's, there's talk in Russia that they're going to plant less acres because the profitability isn't there anymore.
However, say Trump's successful in coming in and, you know, creating some sort of a peace deal in the Black Sea. Well, whatever shipping premium is there will be gone.
[00:47:10] Speaker A: Yeah.
[00:47:10] Speaker B: So, you know, you do have better access into that region of the world. And it looks like European crops are doing pretty good at the start. Like, it's, it doesn't take much for wheat also to swing the other way. Like, it could be. It could have a. You could have a great opportunity on wheat and then it could completely disappear by the time you get to harvest, so.
[00:47:28] Speaker A: Oh, yeah. Yeah.
[00:47:30] Speaker B: Wheat has the possibility to be the best and the worst.
[00:47:33] Speaker A: Well, okay, I'm gonna tell you my worst to most to lose, and then I'll tell you the best and worst because I got a different one. I think wheat's there, but I got a different one. So the most to lose for me, I put yellow peas.
[00:47:44] Speaker B: Okay.
[00:47:45] Speaker A: That's the, the reason I put yellow peas is that India, they'll be harvesting their crop here, and I don't know if it's February, March for pulses, but I think they're going to put the tariff back on. And then from, from there, you know, it's, it's China. And I know a lower Canadian dollar is going to help us out quite a bit, but, you know, when you're staring down new crop offers at 10 bucks for yellow peas, I would be taking a little bit of that action. And if it's not profitable for you at that level, then I don't know why you'd be growing them. But I think that the yellow p. Market can be. Can be surprised here and, and face those. Those biggest losses. So that's what I'm going to mark down there. My. So you said wheat for most to gain and most to lose. And I put canola in that spot because the Canola market. If you take away politics and you take away geopolitical risk, the second smallest crop in 10 years, record export pace, record crash. Like it is a bullish, it's a bullish story. Like, and, and, but then, you know, if we got a double whammy of a Trump U. S Tariff and a China tariff. Yes, then holy dynamite. Right?
[00:48:55] Speaker B: And that's, that's something we've never had to deal with. Right. Like we've had to deal with China hating us, but we haven't had to deal with the U.S. you know, cutting off demand and China cutting off demand at the same time. And that is, that has the potential, like, where does your product go then? I mean, your, your price is going to sink to a level that now it's absurdly cheap on a global market, which should bring back demand. But like you say, that's the, the immediate pressure that that would bring on the market would be quite big.
[00:49:24] Speaker A: Yeah, yeah, yeah.
So I want to talk about acres real quick. So you're talking about Russia. I think Russia farmers like planting less because of profitability. And, and I heard today that US Farmers are investigating putting solar panels on their land instead of, and taking out of farm production based on margins, which I'm like, that doesn't seem like a short term thing. That seems kind of long term. But I thought that was interesting. But when it comes to acres in your part of the world, anything stand out for 20, 25 on higher or.
[00:50:00] Speaker B: Lower on the, I think, I mean, the chatter so far seems to be probably more wheat. Right? Like wheat, the, the way it's held in here when you look at, you know, estimated yields and that, I think that there's the, the possibility that that is at least a safer bet as far as economics go for the farm.
Canola, to me is an interesting one because if it, it depends and I have to assume that we're going to see a bit of a rally by the time we get to spring. We're going to buy some acres there. Because if it stays, nobody wants to.
[00:50:33] Speaker A: Kyle, nobody wants to plant canola at 600.
[00:50:35] Speaker B: Why would you. Right. Like at $600 a ton, it's a tough sell. And with all of the uncertainty, if something does come down where you lose your demand, well, yeah, it makes it a lot harder to put that in the ground. So I think that there's going to be a lot of debate. And largely though, I think what's going to happen is farms will just stick to their rotations and try to make the best of A scenario that, you know, you have to manage proper land management with your rotation. And so if anything, I think the, the creative side of marketing could lead to more of a. Well, we're going to put this commodity XYZ in and we know it maybe isn't the best as far as an outlook goes for profitability, but we'll turn around and we'll utilize a trading account to manage price fluctuations to try to make it better. Right. Whether that's it's growing more barley and then trading canola on the futures later.
[00:51:31] Speaker A: So this is what I've been catching for, for acres. And so I hear wheat acres are on the rise. Yeah. And canola acres are on the decline.
[00:51:42] Speaker B: Yeah.
[00:51:43] Speaker A: And then I also was reading that oat acreage was also climbing and barley acreage was also climbing. And then start looking at the specialty crops out there and the growers I talk to, I would say they're not putting less of the specialty crops in the green peas. And like I haven't heard a flax grower say, oh you know what this $18 flax is actually I'm going to put less of it. Like they're growing a little bit more. It's like, wait a minute here. Like everything's going up but canola, like that just means that we're staying pretty consistent because not everything can, can go up. So.
[00:52:18] Speaker B: Right.
[00:52:19] Speaker A: Because I thought, for me I, I thought oat acres would be on the decline. Like if you want to talk about a market that is giving you, trying to put you to sleep or, or when it does wake you up, gives you a little bit of pain, it's oats, like it's been brutal and, and then feed barley to me, even some of the malt barley offers out there for a new crop. I heard some six and a half stuff and then I, you know, I was in Vacerville or talking to grow in Vegarville and he got offered 550 picked up on farm for off the combine barley. That, that was better than, than his wheat scenarios. Like the profitability was. And the wheat I was like, hey, I think wheat has potential to climb. But yet the barley, you sign that contract and you have it. The wheat is, we're waiting. And so, so I thought, geez, like if I'm looking at barley margins here.
Yeah, that makes sense.
[00:53:14] Speaker B: So yeah. Which is, it's nice if you can lock in something like that with some certainty on a crop that doesn't always pay out. Right. Yep, yep, that's a, that's a good Feeling for a farm?
[00:53:26] Speaker A: Yeah. Yeah, for sure.
All right.
I've kept you long here today, Kyle, so I definitely appreciate your time. I know that we're going to get together in February. You're going to be down in Unity, Saskatchewan, for a grower business conference, is what they're calling at a farmer business conference. I don't know the official name of it. I'll have to ask Taylor. But I'm looking forward to seeing you, seeing you down there at Unity. I'll be there. It's February 20th. For those listening, I'll be in Unity. Kyle's going to be there. Trent Clarenback's going to be there, and I know there's a couple others as well, so if you want details on that, you can email the podcast, and I'll certainly get more details over the next few weeks. But anything else, Kyle, you want to talk about before I let you go?
[00:54:13] Speaker B: I think we've. We've covered quite a bit. I mean, I guess.
[00:54:15] Speaker A: Yeah, we'll.
[00:54:16] Speaker B: We'll see what. It's going to be a very active next couple of weeks. USDA report on Friday, and then you're. You're basically two weeks from a Trump takeover and. And sitting lame duck for a prime minister in Canada at the moment. So what could go wrong?
[00:54:31] Speaker A: Did you get your. Did you see that video?
That guy's rolling out that banner, and you start to see him roll it out, and it. All you see is. Is uck as he's rolling it out, and then you can see Trudeau, and then it says, good luck, Trudeau. Oh, and he, like, Trudeau's with him. He's rolling it out, and, like, you're looking at, like, oh, my goodness, like, this is gonna be. And then it's. Yeah, it's. It's hilarious. So I'm gonna. I'm. I'm gonna order my dad a new flag. Absolutely.
[00:55:05] Speaker B: Yeah.
[00:55:05] Speaker A: It's got to say good luck, Trudeau on it. So. Perfect.
[00:55:08] Speaker B: Yeah. He's got to update the farm now that he's.
[00:55:10] Speaker A: He's got to update the flag. Yeah. What? The futures flag flies every once in a while, but the other ones was flying quite a bit, too, here over the last year.
[00:55:18] Speaker B: With good reason.
Yeah.
[00:55:21] Speaker A: Yeah. All right, man. Thanks for coming on the show. Have a great 20, 25.
[00:55:25] Speaker B: Yeah, you, too. We'll talk to you again soon.
[00:55:30] Speaker A: All right, folks, so let's go into some eating.
Let's go to eating your veggies here for a segment.
And there's just. There's one. Yeah, there's a couple things here to, to cover off.
Number one, obviously India has now said that the tariff exemption continues to the end of February. So we've seen yellow P values climb back up. You know, I'm going to say eleven and a half as the number 1150 a bushel. And so if you've got yellow peas, you know, I know you might want to try to be bullish with the lower Canadian dollar, but I would be cleaning out at that because if you, when you lose that opportunity with India, when they're going to harvest here, I think harvest starts in February or March. I was looking at their wheat harvest numbers because of course herd flour mills were running out of wheat. And then I looked it up and yeah, they started harvesting wheat in February so the shortage will be short lived.
But those yellow peas, if you're not 100% sold, I would be making a move there and I would also at $10 for new crop, I would be making a little bit of a move there myself as well, especially if profitable. Okay, so I think that's number one here is just to handle those yellow peas.
Number two, feed barley values for new crop have been creeping higher and you know the price in Lethbridge, it's gotta be darn close to. I didn't look up the exact number. What I'm working backwards here because I got a Highway 16 bid in Alberta at five and a half dollars a bushel. So that's got to be a 630, 640, something like that.
But feed barley values for many of you, hey, we might be approaching break even and profitability here. And so you know to get that first sale for the 25 crop, to me that makes, that makes sense to get a little bit of feed barley done as well. Okay, now again, you know, I, I don't know everyone's situation and all that good stuff but you know, for me it's something that makes sense when you, when you find a path to profitability, you start picking away at some of those.
Lastly here and I'm gonna pull out me my crop marketing book.
But in, in the book here from the conference we, we did a crop marketing checklist. So let's go to January for a quick moment. And so for January it said, you know, do your year end inventory count. Now that would be if you have a December year end. But update your, your cash flow six month cash flow update. I'm going to put that as number three for eating your veggies. I get, I'm getting lots of questions right now about, hey, I need to generate cash, what do I sell, so on and so forth. Good time to do that six month plan. Get yourself into spring, get yourself a cash flow update so that you're not caught here having to sell something in a pinch in a market that not always the friendliest here in, in February and March. And lastly, my last one, I'm going to throw fourth for this week.
But it is, it is private insurance time.
Now I'm not saying you have to go guns a blazing and go buy some insurance, crop insurance, but it's reaching out to those folks to see what is brewing and what is available.
And January is when that starts. So for me, pardon, if you're going to farm shows the next couple of weeks and so on, you can reach out to those folks and just get, get on the radar, get the process started. You may buy, you may not buy. That's not up to the show to, to figure out, but it's just to get in there and, and start that process. All right, so sell yellow peas, whole crop, new crop, sell some new crop, feed barley, figure out your six month cash flow plan and then reach out to your private crop insurance providers. Holy smokes. Oh, do I even have the right to give you that for advice?
Maybe not, but there we go. All right folks. Well, we all know that crop marketing, it can be stressful at times, but it doesn't have to be.
If this episode, episode 58, if it helped you feel more confident, share it with someone who might need that same peace of mind.
Go ahead, share the episode with them. Help give them some of that confidence. Thank you so much for tuning in to episode 58. I appreciate you. That's it for me this week. Ryan signing off. I'm out.
