Episode Transcript
[00:00:00] Welcome into episode 134 of the what the Futures podcast. I want to talk crop marketing here. This is going to be a short episode. Folks are wondering, this Canola market, is there a lot more to this? Everyone's kind of guessing right now and we're all guilty of looking out the kitchen window as of recording this on Wednesday. It's exciting because we have canola up $19 a ton.
[00:00:24] Hey, folks, welcome to the what the Futures podcast, your quick guide to better future farming decisions.
[00:00:38] All right, folks, welcome into episode 134 of the what the Futures podcast. Of course, I'm recording from the UPL studio here. Once again, UPL's got great products if you're thinking fungicide season.
[00:00:51] Looking to gain a little bit of an edge here. Get that crop what it needs to to continue this growing season, continue to harness some of its potential out there. Check out products like Teleron from the great folks over at upl. I'm sure they'll have a little bit of it, a little bit of info on it at Egg in Motion. If you can't wait that long, I suggest you just call your local retail or your UPL rep and they will get you the latest on that. Of course, I'm, I'm in studio, but I'm sporting a new lid here today. This is very exciting to have these arrive. They, they came in yesterday, 500 hats. This is Quinn Fletcher is our artist. I'm going to go and see if I can catch Quinn here before, before Egg in Motion, get some signed hats and, and get the story behind, behind her work. But they, they're phenomenal. They're phenomenal. The hat. We made some tweaks this year. They've got the nice patch on them in the front here as well. And of course can't quite see with the headphones. There we go. Got the UPL logo on the side. And the most important part, the center of this hat, the mental health line, the crisis line, the farmer help line. 1866 farms 01. That is the Canadian center for Agricultural well Being.
[00:02:07] That is the 24 hours a day, seven days a week helpline. If you're having a tough moment, if you're having a rough week on the farm, there are people that know farming. They're also professionals that can help you through those challenges. Mental health professionals for you. Now, this is a great collaboration. This is year two of this project with what the Futures, UPL and the ccaw. You can grab these hats. They're exclusive to the event. Egg in Motion event. You just come to the UPL booth, you'll see it. You'll see the what the futures set up there. You chat with UPL and they will get you one of these great hats to sport here for the rest of summer. If you want, you know, some of the details here.
[00:02:56] When you come to the booth, it's nice and easy, but all you have to do is either come talk to the summer students there or come talk to the UPL rep, your UPL rep that you've probably known for forever, and just, you know, learn a little bit about herbicide layering or maybe glufosinate best management practices.
[00:03:18] They're also going to cover controlling aphanomyces in pulse crops. And I think I maybe got that word right this week. So there we go. So come see us at the UPL booth, get one of these great hats. We have kid sizes this year as well. Of course, while you're there, you know, we give away to the dedicated listener here. We do have some swag and we have the new T shirts. You may have seen it on social media media, but you, the dedicated podcast listener, come find me at Egg in Motion upl, Tuesday, Wednesday at Brett Young, and come grab your T shirt. All you have to do. We have a code word for this, but you just have to say, where's Ryan? Because we were talking about what to do for a code word, and Yvonne said the last couple of years, she's like, all I hear is, where's Ryan? Where's Ryan? Where's Ryan? And I'm there. I'm there. I'm not far away, but I'm there. But I'm talking the entire time. We're talking about crop markets, we're talking through strategy. That's what I want. As farms come tag in motion and engage, come with a question, a problem, something we can try to solve together. And then you can say, you know, where's Ryan? And get your free what the futures T shirt. We had to do it this way, guys, because a lot of people want the T shirts, but not everyone listens to the podcast. So we've got. This is for you. This is for the dedicated listener. It's exclusive to you. Come get your hat. Come get your T shirt. And we got other things. We got those coloring books with, or, pardon me, sticker books inspired by my kids. But we partnered with Fuel Nexus and we're doing some great sticker books and coloring books as well. So if you're looking for an activity for the kids while you're at Egg in motion.
[00:05:04] That is, that is the spot. So there we go. T shirts Tuesday at upl, Wednesday at Brett Young. That's where you get your T shirts. Hats are going to be at the UPL booth. They're phenomenal this year. We got great colors, great design by Quinn Fletcher. She did a bang up job. So, so looking forward to that. All right, folks, I want to talk crop marketing here. This is going to be a short episode because I've been on a bunch of, in a bunch of meetings this week. Folks are checked out and it's okay to be checked out. It is a time where you may be spraying fungicide. If you aren't, then, then you, you're taking some well deserved time off. I know that your, whoever's listening to this today, this is a little bit of a, like a little bonus, like from my end. You're, you don't have to listen to this thing, right? You could be on the, on the lake fishing, you could be out there doing some camping, you could be golfing. You could be doing something a lot more enjoyable than getting caught up on crop marketing here in the, you know, the first half of July. So I do appreciate you hanging out with me here today and just, you know, working through some of the scenarios out there. I want to start off here with I think the acreage debate and all that stuff, you know, that's going to play out throughout the year.
[00:06:29] You know, we have drowned out acres, we have unseeded acres.
[00:06:34] That's all going to play out throughout the year and where that number will kind of come into play and resonate with markets. It's a guessing game from now till December.
[00:06:47] December is when we get the production totals and that's where the real results will come in. Did we see a significant decline in acreage and certain crops and what did that do to production? Everyone's kind of guessing right now and we're all guilty of looking out the kitchen window. I'm kind of living it the extreme right now because outside of my kitchen window is flooded land, flooded basements, just too much moisture. And so I'm looking at this probably a little bit differently than I should as well. But then I can balance it out by chatting with the lunchbox crew and getting some perspective about how crops, you know, look very good in other areas. So, you know, what I want to say here is that it's going to take some time and with that, that could result in some better pricing opportunities here leading into 2027 if that shortfall comes to fruition. I've been asked quite a bit, we'll talk canola first here, but I've been asked quite a bit about this canola market. And as of recording this on Wednesday, it's exciting because we have canola up $19 a ton, you know, trading at 7, pretty much 780 here, just below that on the November contract. We don't have an 800 out here yet. But, you know, folks are wondering, you know, this canola market, is there a lot more to this? Like is, you know, if you're sitting there buying, trying to buy out a contract, or you're nervous about your contracts versus production, you're sitting here and saying, well, this thing's going higher because of what's happening out my kitchen window. And then you've got, you know, a farm sitting in another part of the prairie sitting here saying, I can't believe this market's up $19 a ton. Like, my, my crop looks phenomenal. I'm going to get another chance to sell near the highs. Like, what a gift. Right now we do have some war premium coming in to this market again this week.
[00:08:50] Apparently this, what was it, letter of intent or whatever that thing was called certainly is falling apart here. The ceasefire is over. Iran attacked five vessels apparently in the Strait of Hormuz. And now everyone's back.
[00:09:06] Yeah, back fighting and bombing each other. So that's over. So war premium is coming back in. Crude oil is up 7% this morning as well. And be bean oil's up 2%, canola's up 2%. So. So there. There we go. Some more premiums coming back in.
[00:09:21] Now I sit here, you know, looking at this market and chatting with, with the farm as well.
[00:09:29] Oh, look at that. A buyer just texted me. They've got a bunch of premiums running today. There you go. $17 canola in central Saskatchewan, $16 canola off the well, not off the combine. October and then wheat finding some strength as well. So it's interesting when you get a higher market and then better basis, which we'll talk about in a second, that's an interesting signal, especially for Canola.
[00:09:52] Anyways, I am at plan today. So if you're sitting here saying, you know, I'm a bit undersold or I'm a bit frustrated, I didn't do anything the last time the market was this high and your crops are looking good, this is a great time to put a hedge there, you know, buy a put or sell futures or if you're comfortable in the cash market, you can go and and take care of some business there, but that this is a good time to consider catching up. Right, and doing some of that stuff.
[00:10:19] Now, you know, I sit here at this level and it's a warning, you know, to folks to be like, hey, take a look. How do you feel about your position? If you're undersold, let's do something, let's hedge, let's consider it. But if you're at plan, then I, for me, which I consider myself at plan, there's no action for me to take quite yet.
[00:10:41] I want to. If I'm gonna sell something in the summer before I know what my crop is, I do like to see, you know, a higher level than where I sold the last stuff. I'm trying to be a little bit patient here, and I am gonna allow the market to go and rally, and then at the moment it pulls back, then I'll decide, all right? And when I look at my plan, I am coming up in the next few weeks to a decision window as well.
[00:11:07] So we'll see how they line up. Do I have to speed up that decision a little bit? Time will tell. Will it hit my number that I have set right now? Because I do have a target set on where I'm going to sell this next tranche of canola. If that level is achieved, then it's good. It all kind of lines up together. So it's a great opportunity. Especially if you're staring out, looking at a great crop and you feel undersold, then there you go. Don't be a stranger. You can go and do that. I also want to highlight here, basis has improved at some of the line companies. Not everybody, but we went from absolute junk basis, horrible basis, to now a bad basis. All right? So it's not like we're sitting here saying, oh, my goodness, this looks phenomenal. And it's just line companies because again, they're going from junk to better.
[00:11:52] So it's still bad, but it's getting better. And if those, those of you that have hedge to arrive or futures first contracts, you can go take a look at that basis and maybe start to set a target and think about pricing the other side of that equation. I'm not seeing new crop basis from. For fall from crushers. They're well covered. So I'm not seeing any action there.
[00:12:16] And even when I see farms go through these buyout conversations, like sometimes if it's a major event, production issue event, you'll start to see a response from the crushers to say, oh, man, like we thought we were covered and now we aren't. Let's go buy this stuff. We have not seen that July 9th. We're not seeing that action. So. So again, this is a bit more localized from a production issue. Flooded out acre, unseeded acre. We'll see now the forecast turns warmer and drier. So we'll see what challenges come with that. So far it's kind of localized from the unseeded acre perspective. If you do want to get, you know, some work done here in the Canola market, again, you guys are catching up. That's great. A good time to consider that. But also Nov. 2027, canola is trading at 743. You can go ahead, take a peek at next year's crop, especially if you're starting to commit to some inputs. Maybe you are a summer fill fertilizer farm and you've committed to some of that. You know, maybe you've pre bought some diesel for next spring. You know, maybe you've started to do a bit of business out there.
[00:13:20] You can go set some targets for November 27and start to take care of a little bit of that. You don't want to get too rough, Rami, that far out though, because we could find ourselves in a situation where ending stocks tighten up, you know, enough to justify some higher pricing. And so you don't wanna go and, you know, unload the clip here at these levels. But you certainly can start to look at profitability. You can start to look at building that plan for 2027 and executing some of that. I think that's good business. If you can lock in some profits for next year, knowing your fertilizer needs, your diesel needs, some of your expenses are.
[00:13:59] You can kind of get going on that. All right, so that's Canola for today. And I think it's exciting for many, a little bit stressful for others. It's the environment we're in. I still look back at the summer as being some of the best times to sell grain. Right. So don't think I'm discounting that. It's still when you have all these unknowns, when you don't know what the unseeded acre is, what you don't know what production is going to be later this year, there tends to be a premium established. Now, are we getting some weather premium in the mix here as well? Maybe. Right. Maybe we're seeing that. So I do fully anticipate that I'm selling stuff in the next couple of weeks here.
[00:14:36] I'm just not doing it now because I've already done this sale and I'm, I'm okay. I'm at plan, but it's a good time for you to catch up. All right, folks, as I said, I'm going to be at the Brett Young booth on Wednesday at Egg in Motion. So that's going to be Wednesday, July 22nd. I'm going to be there all day. So set up there all day giving out T shirts again. You just have to say, where's Ryan? That'll unlock your. Your what? The Futures limited edition T shirt. Really excited to be partnered with Brett Young this year. They've got some great plots. They've got a food option this year. So if you want to come check out some plots and grab some food, they've got that going on. They also have a beverage center in the afternoons if you want to get hydrated, you can come and check that out with Brett Young. So that's again on Wednesday. You'll see me set up there, see the flags with the futures flags. You see the table and I'll probably be walking around recording stuff as well. So come in and check that out. We're also really excited that Brett Young is joining us in Brandon at the Crop Marketing Made Cool conference. And I just want to remind listeners here again, go to ryandenee Ca check out the conference details. We did release the agenda last Friday. A rough agenda. You should go check that out. It's a recorded episode on YouTube or wherever you get your podcast. And you can get more details there. We have 10 codes. If you type in the word unhinged, you save $100 on your crop Marketing May Cool conference ticket. So you can go and take a look, take advantage of that deal and get your ticket. December 1st second. Brandon, Manitoba. We're going to have some fun at the crop Marketing made cool comments and we're going to learn some stuff as well. Okay, now I wanted to talk kind of small grains here, then wheat, spring wheat and then we'll talk inputs for a second. But so we get our acreage numbers. I think for the, for the most part from a small acreage perspective, those smaller acre crops perspective there was not, you know, anything really damaging that came out. Any, nothing that really had to sit here. I was worried about feed barley. I thought feed barley might be a crop that we'd have to be a bit more aggressive on, you know, based, based on the stats can numbers. But you know, you start looking at this, you know, barley acres were up but not, not scary.
[00:17:03] Nothing that we really had to get.
[00:17:05] You Know, too. Too worried about, in my opinion, chickpea acres. Sorry. Those were still pretty big actually, but they were lower year on year.
[00:17:13] Flax acres were up 5%. Highest in four years. I don't know, maybe that one. You could put a bit of a, you know, a morning beside, just. Just to stay sharp on that one. But lentils, second lowest acres in five years. Old acres down 15%. Smallest P acreage since 2011. Smallest Durham acreage since 2021. You know, you go down the list. I just want to practice patience.
[00:17:39] Practice patience when it comes to marketing some of those smaller crops. Smaller acre crops, if I can say it like that and just be a little bit patient. Because with Mother Nature now, I wonder if we get excessive moisture or it gets too hot. I just wonder if we kind of take care of some of the hangover in those.
[00:18:05] In those crops and that leads to price appreciation as we go into the fall. Maybe not fall, but into winter.
[00:18:15] So I'm. I'm very comfortable on some of the smaller crops to allow the situation to develop and then see what comes at us here from a weather perspective over the next few weeks leading into harvest window. I think there's a real.
[00:18:32] A real story, a conversation that can be had about appreciating prices. Not again. It may not be a scream and rally, but just better pricing from where we're at today. Even, like yellow peas, I'm seeing some, you know, prices out there. Posted bids in the sevens for new crop yellow peas. You know, do I actually think it'll transact at that for off combine movement? No, I think it'll be significantly higher than that to get some business done. And you guys, you farm like nobody's doing. In my opinion, nobody's doing much business right now. So the buyers are a little bit bored. Again, if you have a monster crop, then the prices will stay lower for harvest and the buyers will wait for you to come. But if you start to see a little bit of a decline here or less action. Looks like we have a couple podcast guests joining us. You guys want to come say hi on the show real quick? Daddy, it's over. Let's go. All right, the kids are telling me I got to wrap up the show here, so we better.
[00:19:32] Well, we are heading out as a family to go camping here. And so the. The truck is idling and it's time. Time to get going. All right, on. On the switching gears to wheat here now. And we're getting towards the end. We are sitting here looking at. We're looking at Better basis. So we're looking at better basis. We're starting to see some fall business getting done with our line company. So that's translating back into better basis. Now, if you were locking in futures in the rally this spring, now this is your time to take some action here. This is your time to tidy up the second half of that equation or at least start to consider it. It wasn't a consideration at all before, but now it's getting to the point where you could start to look at this stuff now from a futures perspective. I'm not looking for any big rallies in wheat right now. Maybe if corn rallies with weather, then away we go. It'll, you know, get wheat going as well, but not looking for anything big on the wheat side. But I do just want to highlight if you, if you did do futures only, this is the time to consider locking in that basis and you'll be surprised, pleasantly surprised at what comes back at you from a net price perspective. All right, you're going to. Those are going to be some really dandy contracts. Now, is can basis continue to appreciate? Yes, it certainly can. But wheat crops, out of all the crops across the prairies, wheat looks the absolute best. I don't foresee anything super exciting to rally basis significantly past these levels. Maybe a bit more here with some demand and lack of farmer selling. But again, I do think it's a good time to tidy up some of those wheat futures. I'm not excited to price wheat right now. Again, I'm pretty much at plan, maybe a bit shy at these levels. There's no reason for me to step out and get more aggressive. I am a little bit worried about the rest of the weather this summer. I'm a little bit worried about disease, pressure and what that can do. And I'm also aware that you could contract your weed at the wrong company. You know, maybe you produce something that's of high quality that someone else is going to pay a big premium for, or maybe you produce something that is of lower quality and you're heavily discounted. But if you had it over at Company B, the discounts weren't, wouldn't be as bad. That all comes into consideration right now for us. All right.
[00:21:52] Okay. That's about all I have for this week, guys. Again, I'll see you at Egg in Motion here in a couple weeks. If you're taking some time off, I hope you're enjoying that time away for eating your veggies here for this week for July.
[00:22:06] Just going back to the guide here, you know, number One, review your outstanding targets. If your crops are looking good, you may want to be setting those some targets up as well. So reviewing that, reviewing your cost of production, have you gone ahead and had major repairs outside of of your budget? Have you done some different things with your inputs? Added more insurance, maybe hail insurance? That's been a big topic of, of conversation. So that's, you know, the second one here is just updating your cost of production and, and getting that lined up mid season here, getting fertilizer quotes for next year's acre summer fill programs. I keep that top of mind. And then also, you know, reviewing how your crops look, plus or minus, how are my crops looking and what's that doing with impacting. How's that impacting my decisions? All right, so there's a couple more, but I'll leave those for next time. So that's for eating your veggies. Lots of work to do here, especially if you have a few moments to get that tidied up. All right, folks, again, egg in motion. We'll see you there. Tuesday, 8am recording live with John Deere. Come heckle me, come say hi. Uplift to grab your your hats all week. That's where you get them T shirts. Where's Ryan? That's the code. Come snag those at UPL on Tuesday. Brett Young, Wednesday. Both have some great plots and lots of great things for us to, for, for us to check out. That's it for this week, folks. Enjoy the weather, enjoy the heat, if you're looking for heat. And I certainly appreciate you joining me this week. Any thoughts, comments, you can send them my way. Ryanhatthefuturespodcast.ca and of course, if you found the episode, share it with a friend or neighbor for the what the Futures podcast. My name is Ryan and positive moment. I'm heading camping so I'm out of here.
