Episode Transcript
[00:00:00] Speaker A: Today we're going to talk about what's really moving the grain markets this week in Western Canada. Of course, we have a great guest joining us this week. We'll bring him in momentarily. We got a pile of questions that came in. Now do me a favor, hit the subscribe button, hit the like button, leave a comment. Certainly appreciate that. Helps us drive the show here. Moving forward. Markets this morning for your Tuesday, as of a few moments ago, Canola trading up around five bucks a ton. The March contract trading at 650, just over the 650 level. Trying to get back to those highs from last week. Soybeans up 8 cents at 1068. On the nearby spring wheat down a couple of pennies here at 569. We've got Kansas City wheat down 2 cents of 533 again pulling back a little bit here from the highs. Not really an alarm on any of the wheat markets at this point. No panic out there, but, but a pullback nonetheless. Corn up a penny at what? 426, I think is what I wrote down. Bean oil up 2 1/2 percent.
54, 54. And I forgot to write down the Canadian dollar. So you'll have to tune in next Tuesday for that one. All right, folks, lots of questions coming in. You didn't come to the show here just to see what futures were doing. You could check that out on your own. Questions coming in from farmers. This is the pulse of, of western Canada. Of course, there's lots of fertilizer discussion happening out there. We're gonna, I'll comment on that maybe a little bit later on in this show. But I had a great question come in here from Alberta, Smoky Lake, Alberta. What is the potential range of the yellow and green pea market with the China tariff? Pause. What happens if we make a deal with India? So that was an interesting one. We got a question about gold and silver. Are they correcting for the next leg higher or is this the end of the rally? I am not qualified to answer that one. I do have an opinion on maybe market structure. Yeah, we'll have to bring in maybe on the Friday show. We'll bring in an expert here on gold and silver. So, hi Ryan. Just wondering which month between now and July has the best chance of achieving the highest Durham price and what is a realistic target for southern Alberta? The fourth one is this Canola rally over what stands out. And then I also have a bean oil question from Bob came in. You know what's going on with soybean oil? It's really jumping around. What's going on with that one. Right, right. So those are some of the questions that came in here that we'll start to tackle. We got one in the chat. Thoughts on seeded acreage. Can we seed 100% of Western Canada into Canola as that is the only crop making money coming in from Wheat King. Great question here. I'll take a note of that one as well. Alrighty, headlines this morning and this may start to answer some of your questions. So these are the three that I pulled for this morning. There's a pile of them out there, but these are the three that to me have some maybe consequence or reward here in the near future. Number one 45Z guidance that could be coming today or later this week. Again, if you want to look at the soybean oil rally this morning in the Canola rally or the climb, I would relate it to more clarity around this guidance. Okay. Susan Stroud was on the show a few weeks ago. If you check out that episode for the Nitty Gritty.
But guidance is good. Clarity should be good for this. All right, second storyline for me for this week, Ag Rural has Brazil harvest at 10% complete. Of course, last week on the show it was 5%. So they're moving along StoneX with 181 point something million metric ton crop. I just want to say a large crop getting larger. All right, not, not by crazy amounts, but getting larger. So it's, the impact to you right now is, is minuscule, but there's a big crop being harvested. There's a theme here that started in 2025 about big crops. And you know, as of February 2026, another big crop coming in. All right, and the third one, US has made a trade deal with India. India to buy $500 billion of U.S. goods, including egg products and India to not buy Russian oil. Oh, the coffee is good this morning. Those are the three kind of headlines I had coming in here for today. So I'm going to, I'm going to bring in our guest now. We're going to get him out here from behind the the curtain. And let's bring in John to Pap. We're going to cover some of these questions here.
Good morning, John. How are you doing this morning?
[00:04:30] Speaker B: Good morning, Ryan. I'm great. That was a great recap, by the way. I feel like I don't have to say anything now.
[00:04:35] Speaker A: You have to say it all yet, John. But I appreciate that it's learning by, by trial here. It's. Yeah. Hopefully gets smoother each Week, but appreciate you coming on the show. Of course. John from the Trading Floor. John, do you just want to give us a quick little update on what's going on with the Trading Floor with that project?
Oh, sure.
[00:04:58] Speaker B: It's something I started about a year ago.
It's an online community.
I called it the Trading Floor because I used to trade on the trading floor. And I felt we did more than just trade. It was a community. It's where you went to learn what people are doing and sometimes personal things, but often about the market. And I thought that's something that we just don't have in the farm community.
I also run hedge program for farmers and I wanted to send out information to them about the markets, what I was seeing in the markets.
And I would write a weekly newsletter kind of thing. And it was often, by the time I wrote it, it was often old news. So I wanted to find a better way to toss the newspaper, so to speak.
[00:05:41] Speaker A: Yep.
[00:05:42] Speaker B: So I went online mainly to, to drive information to guys in my advanced grain pricing program. But then I thought, why not open it up to others? So we've got a few guys on there now. Trent Klarnbeck posts some non subscription type information. He's got, of course, subscribers. Brian Como's on there. Yep, you're on there now once a week, Harvey Jackson and myself. And so we all got a different take on it and the more the merrier. And yeah, it's going, going really well. We're going to have an advanced hedging training program on there soon. Good. So yeah, it's like that. Good.
[00:06:23] Speaker A: Well, I know for me you get some morning commentary, you get some afternoon commentary on there and then you get little hits like you put out on Friday. This is the first thing I wanted to talk about is there. So you put a note out there about some canola vessels trading and I want to know, is there like a secret club in western Canada that finds out about two vessels of canola traded to whichever country or to China? Because I used to get these from a gentleman named Wayne who would just give us these little like whispers about we just traded five cargoes and I'm like, I can't find that anywhere. Like what, what club is this? Like how. I don't know if you can even share. You might, you might get in trouble here. But how does this go down?
[00:07:03] Speaker B: I'm trying to think, where did I find that out?
It's the old trading floor, guys.
[00:07:09] Speaker A: Yeah, exactly. Yeah.
[00:07:12] Speaker B: No, I, I always thought that the trade. And I mean I traded for Cargill for a number of years. So this comes from experience.
Traders are like old women. They like to gossip and they, they also like to brag. They, you know, and if anybody is hurting, say they got a vessel under merge. That's. That's good gossip. Yeah, right.
If anybody's in pain, you know, it's that kind of thing. No, it's just market chatter.
But we did get more information before. I would say that then. Now it's, it's. We're cloaked in a lot more secrecy than we were before.
[00:07:47] Speaker A: All right, sounds. Sounds fair. Okay. I wanted to ask you about canola basis. So farmers, we're looking at futures, obviously, futures popping higher today. But you, I love your passion when it comes to best price. Like there's a futures equation to this and a basis portion to the equation.
And you are passionate about both sides. What are you seeing in basis? How do you feel about canola basis in Western Canada moving? You know, where is it moving to later this winter, in your opinion?
[00:08:18] Speaker B: Okay, great question. I'll start with where it's been in the last little while. But I've noticed even during this rally, basis, on average about 10 bucks a ton the last 10 days or so, maybe a little more, which I find interesting, typically, because we'll use the term, the farmer tends to be a flat price seller. And so when the, when the futures market is rallying, the basis will fade, the basis will drop the other way, particularly because of targets. If targets are going to get triggered, the companies want to make sure that they've got a good basis embedded in that. So what we're seeing now is basis is starting to climb. There's a seasonality to it as well. But the thing hanging over it is the huge carryout that we're going to look at with China out of the market for half the year, we're gonna have. Yeah, my estimate is going to be over 3 million tons carried.
Well, that's got to come to market. I don't know too many farmers that want to carry that through an inverse. No, grain companies don't.
So what you're going to see is later in the season. I think you're going to see a rush to the, to the door, basically. But in the meantime, I think we'll still see some good basis appreciation. I figure we'll top out sometime in March.
[00:09:32] Speaker A: Okay. Yeah.
[00:09:33] Speaker B: And March is a good time typically anyway, because the grain companies are trying to fill their pipeline because when scenic comes around, of course they taper off. So they want to fill up the pipeline. So you typically see good basis levels there anyway.
[00:09:48] Speaker A: Yeah.
[00:09:49] Speaker B: So later in the year, I think you're going to see guys are going to hang on, they're going to hope for better prices, particularly because we've got a bull market going on right now. And basilis will certainly soften after seeding. So I think there could be another 10 bucks in it at least.
[00:10:03] Speaker A: Yeah, good. I like the timing as well of like March, March, early April.
Because what tends to happen is as people get planting and conditions get known, if conditions are good, then they bring that canola to market. And so I think, you know, farmers that want to hold this into June, July just needs to need to pay close attention because that, you know, there's no guarantee that that peak will be at that time. In fact, I know someone that would argue that the peak will not, not be there most years. But anyways, I'll digress for now.
[00:10:33] Speaker B: Let me just say this. You might have the best price for June delivery, but it'll happen in March, right? Yep, yep.
[00:10:40] Speaker A: No, exactly. No. Good call there. All right, now, we did have questions about the canola futures here. What do you think about this, this rally here? You've got hobby, obviously, higher crude lately, prior to a couple of days ago, but some higher crude, some higher energy, higher metals, higher bean oil. What do you think about canola futures in that situation? Where are they heading?
[00:11:03] Speaker B: I always thought that canola was a bit of the tale of the dog. We tend to follow what's going on outside, so it makes sense to pay attention.
You mentioned the India tariff situation.
I read this morning that's quite, quite bullish on oil because the Americans think, okay, well maybe we'll sell them a lot more oil because they're large consumers. So that's very positive.
There's a lot of positive things hitting the market right now. I always think that around this time of year we have to worry about South American weather as well.
You know, the size of the crop and so on. But yeah, I'm not a technical trader, but all the guys that I know that are technicians, they like this market. We're crossing red lines. We're staying above moving averages and so on. So, yeah, so it's all good. So the trend is, your friend, let it go. You know, in my hedge program, we have been hedging. We rewarded this rally, unfortunately, about 10 bucks, 15 bucks ago. But that's okay.
Yep. On average, we're doing quite well. So, yeah, I just think that there's a lot of outside markets that are Driving us. The one thing I noticed this morning, though, here we're up four or five bucks now. We were up seven earlier. The board crush margins are very strong, six bucks.
So what that means is we're not keeping pace with the products. We're still cheap relative to the products compared to yesterday. So we're getting dragged along. And so that's with the crush margins improving like this, that tells me that there's even more upside.
[00:12:40] Speaker A: All right, good stuff. All right. Well, thank you so much, John. I've got a few more questions. I'm going to get to the great perspective and if you have any thoughts on some of these, certainly chime in here. We're down to the four and a half minute mark left in the show.
All right. So I did have a question come in from Riley.
He says how much influence will the stats can report have this week, specifically on Canola? So I believe this is the December 31st stocks report is what he's talking about there. John, do you watch the Statscan stuff as well or do you want me to talk about this for a sec?
[00:13:19] Speaker B: You go ahead. But yes, I do.
[00:13:21] Speaker A: I think when you look at the Statscan report later this week, a product like wheat or barley, you could get a pleasant surprise because we've been exporting so much of those products that you could get a pleasant surprise in that situation.
But in Canola, I expect this number is going to.
It's kind of old news. It doesn't represent the trade moving forward March 1st on.
And I don't expect a friendly number. John, what do you think?
[00:13:50] Speaker B: I find that with Canola, because it goes up for export or to the crusher, and we know those numbers that it's typically hard to have a surprise. But you're right with wheat and barley, because we really, especially on wheat, we really don't trust track feed usage of wheat. And some, some years you can have a lot of wheat fed and some years not so much because of the quality and so on. Yeah. So you can get some surprises there.
But on Canola, I mean, we know where it's been.
If there is a surprise, it's because they got the production wrong. You bet.
[00:14:27] Speaker A: All right, sounds good.
Okay, so we're down here to the last three minutes, so I'll try to answer a couple more.
So there was a question about yellow and green peas.
So the potential range, that's really putting me on the spot here trying to pick a range out in this market. But if you give me like a 20% range, I could probably get it? Not too bad. But what I want to say here with India.
So obviously the US has made a trade deal with India.
I actually don't believe that the tariff to India, yes, it's had an immediate kind of impact overall to our market, but I think it's been actually quite minor overall. And India can put that tariff on. Take it off, put it on, take it off. They use it as a bit of a valve. Right. And so if we get a deal done with India and the valve gets turned open again, then, yeah, there's a little bit of strength that can come into the yellow pea market. Green peas are totally different ball game here. But don't forget we do have a tremendous amount of supply here in Western Canada. And with fertilizer doing what it's done the last couple of days here, I don't. I think a few farmers might take a harder look at pulses now. So I'll try to get a little bit more into it on Fridays. What the Futures podcast. Maybe we'll get a bit of a deeper dive on carryover or carry out. So I'm going to carry that one over and I'm going to carry over Sheldon's Durham comment, because you're not going to like the one I have for you right now, Sheldon. So I'm going to dig into this to see when is the highest Durham price expected here and a target for Southern Alberta. All right, now we're down to the last minute and a half. Here are some of my just rapid insights, folks. We are in a time of year where we have choppy sideways markets, generally speaking, like, yes, there's been strength in wheat lately, there's been strength in canola lately. But February, March can be a little bit choppy in my opinion, or slow. And that's where I've been an impatient marketer the last couple weeks as well. Looking at this canola rally saying do more, right? But it's actually behaving quite normal, quite well. It's just a bit of a slower time period because we don't have that weather or those fundamental changes happening. All right. We're also being influenced by metals, energy. Those have an impact as well. I want to throw a shout out to red lentils out there. $0.25 reported in Central Saskatchewan. That's a new high going back many months. So 25 cent red lentils, faba beans heating up as well. $8 a bushel plus for those faba beans out there. Snowbirds. Anyways, I thought I'd mention that one. And then lastly here before we get to our sponsor of the week, urea and fertilizer pricing. I'll get into it a bit more on Friday, but I need you to have a heart to heart with your supplier because it is panic city in western Canada. To me, this is a somewhat localized event. There are reasons for it, but it's just something that you need to have a heart to heart. All right, folks, the beeper is going off behind me. I want to thank DG Mobile Seed Cleaning.
That is Dion out of central Saskatchewan. A couple of young fellows, actually, Dion and Carter doing a heck of a job cleaning grain there. I got a shout out Adormy Saskatchewan local business. Right. So Dion can be reached at 306-321-5411 for your seed cleaning needs. Reach out to those guys at DG Mobile Seed Cleaning. I'm out of coffee. Thank you, John, for joining me. You can still hang on, John. I'll hit the end button. But thanks for joining me this week. That was awes.
And for everybody that tuned in, I'll see you on Friday. Join me on what the futures. I'm out of here, guys. Take care.
