Episode Transcript
[00:00:00] Speaker A: All right, folks, markets this morning. We're going to have to give it to you live here because it is evolving. But we've got canola up slightly this morning, up about 2 bucks a ton right around the 719 level on the July contract. Also the similar level on November. So we'll ask you his thoughts on that. We've got soybeans up about a nickel this morning at 1168. Bean Oil Trading slightly lower now, down almost a percent. Spring wheat up half a penny at 6:40 kc wheat having the most fun here this morning. Well, it was 8 cents. Let's double check that one up. Oh, a full 11 cents now as of recording. We'll tell you why in just a second. Corn's up about two and a quarter cents here as well. And we've got what's left. West Texas down four and a half percent. Just under 95 a barrel. The Canadian dollar at 72, 97.
I've got a couple of grain price updates for you, Prairie, Prairie wide here. Just some honorable mentions from a price perspective. I wanted to make note here of feed barley specifically. So feed barley for the better part of a year in, in Alberta, of course you've got Feedlot Alley that commands traditionally the most attention from a feed, you know, a feed grains perhaps perspective.
And so for the past year though we've had tremendous and maybe longer than that but some strong export programs and Feedlot Alley could not compete as you came, you know, further and further north Central Alberta, Red Deer, North Feedlot Alley could not compete. All that barley was going to the coast. All right, that has changed here just slightly.
And for the first time in over a year we've had a competitive bid in the Edmonton region. All right, now this is just a, a scenario where the export values have started to fall off here a little bit and Feedlot Alley is now holding steady but competing. So that's an interesting thing. Delivered bids into Lethbridge are around 630 to 640 a bushel for fall feed barley. All right, we've got malt holdings steady at least for our farm. We got quoted 580 a bushel in central Saskatchewan plus for eight works out to about 610 in. Our latest feed offer was 550. So it's causing the farm to really do some thinking because of course that malt is not going to move until later on in the winter.
All right, old crop, yellow peas. Rae Glenn, a couple of Rae Glen bids here. They've got a great little pricing update that comes out on Wednesdays but yellow peas old crop yellow peas $8.50 to $9 a bushel. In some cases that's picked up on farm as well. If you've got old crop yellow peas, ding ding, ding. You have a window here to get this cleaned out. Flax, new crop flax at 1650 was notable as well for those flax growers out there.
And then lastly, this is not from Ragland but new crop green peas $9.50 to $10 a bushel. That $10 is pretty available for new crop green peas. Green pea growers are not excited to hear that value. But hey, I wanted to bring it up last couple things here before we get to the news.
Input prices. I've got NH3 coming in at 1600 bucks a ton in Alberta. I'm going to assume that it's lower in Saskatchewan. I have not seen an NH3 price or an ammonia price here in the last while for Saskatchewan. But in a weird way, Saskatchewan pays less for NH3 traditionally in my research.
And then I've got urea coming in at 1300 bucks a ton. And my latest fuel quote, this is from Fuel nexus delivered Vegarville, Alberta because I had to pick a spot a $42 to one 44 a liter plus GST. That's the only other tax that you would throw on there. So a little perspective on the daily drop fuel price as well for you.
All right, headlines this morning. We'll bring in Q in just a second, but we've got US Naval blockade of Iranian ports. So the Strait of Hormuz continues to be a big headline here across all of our news feeds. We've got interesting move here by the US where they are now saying, hey, if you wanted to bring something into Iran, we're going to potentially block you from that, causing economic grief for the Iranians. And also you start thinking about what they're importing and if that gets blocked, what could that have for ramifications, we've got a winter wheat here. A U.S. winter wheat crop dropped to 1% of the good to excellent category yesterday afternoon. But I want to highlight that soft red winter is kind of puffing up that number a little bit, pumping it up a little bit more than it should be. If you isolate it to the hard red winter areas, they're at about 18% good to excellent. So that's why Kansas City is catching a nice bid here, up about a dime this morning. I've also got a note here that the Russian crops, it's early, but those winter crops look good also The US Corn Belt, seeing, you know, moisture events, small delays on planting that, that corn crop, but nothing of concern yet. And the Brazilian soybean harvest is wrapped up or close to wrapped up.
All right, Quentin, welcome to the show, buddy. Did I miss anything in the news this morning?
[00:05:33] Speaker B: No, that was pretty thorough.
[00:05:35] Speaker A: All righty. I wanted to, we got a pile of questions from growers and also folks, you know, throw them in the chat here as well when you have a moment. And good morning to you as well, Trenton. Thanks for joining the show here this Tuesday morning.
Now, before we get to the farmer questions that have come in, I want to ask you here from your perspective, what do you see in this wheat market?
Obviously the weather conditions or the growing conditions as we just talked about. But is there anything else, weather wise or market wise for winter wheat that's catching your attention?
[00:06:14] Speaker B: Main focus that I've been trying to watch is just that US Weather and what it's doing. The COT data really accumulated. They've been making a long position in the managed money, building up a long position.
I guess that sort of got rolled back when we kind of fell back the last week or so and now, you know, maybe. Did it find a bottom? Is it going to revive with more weather concern?
Yeah, that's kind of what I'm trying to pay attention to.
[00:06:41] Speaker A: Does the chart look Kansas City wheat chart or even Minneapolis spring wheat or Chicago? It doesn't matter to me. You can pick your poison on that one. But do the charts look healthy or are they breaking down? Are there any, like, alarm bells on these ones or are they performing at a, at a level where you sit here and say, you know what, this thing's still showing signs of life or, or it's not Panic City.
[00:07:04] Speaker B: Yeah, I got a little bit of, you know, concern about maybe a little bit of a breakdown. Some of my charts have looked a little bit bearish, but now you're getting a little bit of a revitalization.
Yeah, I would say I was a little bit concerned. I'm hoping that, you know, this rally can be sustained.
[00:07:22] Speaker A: Yeah, well, I, if I, if I want to state my bias here. This morning, I, I chased, chased the juice a little bit on Friday and I sold KC Wheat thinking that the rain events would be, would be better. I know better than that, though. When you're in a drought, you're in a darn drought. And so I'm feeling the pain here as we start the week. All right, so Ken threw in a question here about War Premium.
He says it seems like the Only crop with a war premium is canola.
Are the other crops going to catch up or is Canola going to drop? So they are equally.
He uses a different word, but I'm going to say not great.
[00:08:03] Speaker B: Right. I don't really think the other cops are going to catch up to Canola in terms of like war premium right now. I guess maybe if things, you know, sustain for a long, long time, Fertilizer, you know, that story becomes even bigger and bigger. Yeah, maybe then. But right now I don't see there being a reason. Then I think you're also kind of starting to see I don't have the math on my side here necessary to support this. Not that I just haven't looked at the math. Like today, you know, crude's down 5 or so dollars and Canola's not like red. So things are starting to decouple a little bit. They are.
Maybe that sort of means the end of the correlation cycle is probably coming to a close or coming. Yeah, I don't believe that you'll see lots of war premium we uploaded into things now. I think the wheat rally today is more on its own story of weather more than it is on war.
[00:08:51] Speaker A: Yeah, yeah. Crude now down 6% and canola, you know, still holding up two bucks. Yeah, like a ton.
[00:08:58] Speaker B: So if you would have told me that, you know, yesterday, I would, you know what crude is doing, I'd say it can all be red.
[00:09:03] Speaker A: But yeah, so I ken, I'm going to add to this as well. When you look at this war premium, maybe, maybe down the road if this fertilizer story gains some legs, a shortage of fertilizer.
I'm a believer that this is more of a 2027 story than a 2026 story.
But maybe there's something down, down the road there and then specialty crops, you know, pulses are just, I don't want to say it's a mess, but like eight dollar yellow peas in central Saskatchewan, new crop, yellow peas. I don't want to say that's great, but you know, traditionally not, not terrible, not a terrible starting point, but specialty crops, we just have this glut of supply. And if you get a chance, folks, Trent Clarenback had a gentleman on the show, I believe. David Knobs. I, I believe that's the right fellow this week. But they did a wonderful specialty crops update, so check that out on YouTube as well.
It was well done for lentils, canary seed, all those crops. All right, Quentin, the.
Are you big on, on like spreads like the July, November, Canola is trading Almost at the same level, there's actually a small carry to November.
Is this something that, that you pay attention to or, or have experience on? Because I look at that and I say, oh, what's happening? I don't know what the technical term is. I don't know if it's troublesome.
[00:10:30] Speaker B: But, yeah, you know, I don't spend a lot of brain power staring at the spreads because I find that when I'm working with clients, they really just want to isolate the two out and try to make decisions around old crop and new crop. A lot of that spread stuff will, you know, come from what's going on with the weather and how the market feels around, you know, trying to predict the future there.
Yeah, I mean, I don't have any too much commentary on that.
[00:11:00] Speaker A: All right, fair enough. I, I, you know, I, I look at that and say, normally there's a little bit of an inverse between old crop and new crop that has disappeared here. To me, that feels like a bearish signal.
But we'll see if anyone in the chat has some context. And of course, I kind of call the spread master. Here's John DePape. So if this hangs in, we'll get John to come and join us and talk this through as well. Next one came in from Jordan.
I've Pre sold about 40% of new crop Canola. If the markets go on a downward slide, what's your opinion on buying it back on paper?
Quinton, you're, you're the guy on this one. So what is the downward slide? Number one. And also, I'd ask Jordan what his kind of growing conditions look like too. So go ahead, though.
[00:11:49] Speaker B: Yeah, I mean, the answer is yes, I think. Right. Yes. It's just, you know, to what degree is that pullback happening? Are you comfortable with reowning it and a little bit of, like, what time of year?
So, yes, the answer is yes, there's a few factors in there. You know, can you market time that sucker good enough to, you know, feel comfortable? Are you just aiming for the 200 day?
680, 670? Yeah, there's a few factors in there, but the answer is yes.
[00:12:15] Speaker A: I look at, and I think you look at crop marketing as well in this way. Quinton, I don't want to put words in your mouth, but there's opportunity. Not every day, but regularly. Right. And so for Jordan's question, like, if there's a pullback and we find support at whatever level, that is the 200 day, whatever it is, you know, and you Sit there and say, well, this thing looks like it has an opportunity to recover. You know, you might do that three, four, five times throughout the year.
[00:12:42] Speaker B: Right.
[00:12:42] Speaker A: You could do that many times and reown it. So I'm with you on that one. I, I know for myself thinking kind of the same thing, especially at the start of the growing season. I've got some unknowns and so why wouldn't I own a little bit of a call option, reown it a little bit until I got comfortable with my, my growing season at least on a significant pullback here. So that was a good one. I wanted to also toss your way. Quinton, do you have a favorite strategy that you've executed on? I said over the last month, but since the kind of the war has started in the Middle east, is there something that stands out strategy wise since the war started?
[00:13:24] Speaker B: To be honest with you, it actually being crude oil, I've done a few bulk off spreads and those worked out, you know, so. And they're asymmetric. So like it was like $5 max loss on the downside per barrel and you know, $17 on the upside. So I kind of like that and you know, already in and out of those for some folks and yeah, it worked out well. I liked those, you know, and I'm glad that $5 is the max loss instead of, you know, that $20 down day or whatever we had. Like you don't want me part of those either and you don't want to be speculating too hard. But also it's nice to offset some of the fuel costs you're going to see for sure.
[00:14:04] Speaker A: Yeah. And you're buying this input, right? So you're trying to hedge it as best you can in this volatile environment. So awesome. I know. I struggled. I bought a call option on West Texas. I was like the only one who had a call option in a rallying market. And my call wasn't doing a darn thing because I went off June instead of the nearby and I just hung out there. I got out okay, but I think my fuel price went down by like a quarter of a cent liter. So not, not a big, not a big win. Any alarm bells going off for you?
You talked about it in your charts a little bit earlier, but does anything stand out? Are you worried at all about this current Canola market or this current wheat market? And then I'll get to a few comments from the chat.
[00:14:48] Speaker B: So commitment to traders data.
You know, we looked at managed money's position as a percentage of open interest and where it's at and I like to also group it, you know, veg oils, so canola, soybeans, soy oil, you know, and they were ranked, you know, over the last year. They're like in their hundred percentile last little bit, last few weeks. That's sort of an alarm bell, you know. And last week the that managed money added to switch bean oil. So you know, is, are those positions a little too extreme? We've seen a little bit of a back off in Canola, you know, are we going to see that, you know, continue and are we going to see it, you know, being oil and you know, drag things down a little bit? That's when those positions start to get to their 100% over the last year or two years, however, you know, long you want to have your look back that that's an alarm bell to me. Yeah.
All right, fair enough with that.
[00:15:43] Speaker A: Yep, okay. No good point for sure. Q.
I'll just get to the chat here for a second. We've got Brian from Canadian Ag Markets Again, another great YouTube channel for folks to check out. But he says when we talked about that canola spread, the market's not too worried about supply on the front end of this season, paying farmers to store in quotation marks not usual for spring in this canola market. So yeah, I did make a mention to the lunchbox crew that you know, maybe old crop opportunities are are we need to be a bit proactive here to tidy up business over the next few weeks. And then we have Harvey coming in. How does the commodity super cycle play into grain markets and other markets?
Well, it looks like we'll have to maybe set some more time aside for that in the future. But a commodity super cycle is a prolonged period lasting roughly 10 to 30 years where commodity prices remain well above their long term average.
Now I'm going to be a little unpopular in my opinion on this one, but I'm actually not a believer yet in, in the commodity super cycle I, I think they're, you know, you can look back and say oh yeah, Ryan was an idiot, it was the start of it. But as of right now, I don't believe crude oil prices are going to drop to a significant level. But I'm also not a believer in the commodity super cycle at this time.
It's a buzzword out there. A lot of folks talking about this. I'd love to see it. Don't get me wrong, I'd love to see everything on a 10 to 30 year run higher, above average prices.
But I'm not quite a Believer at this time. I certainly.
I want to be bullish in this market, by all means, but I'm not hanging my hat on that one quite yet. All right, just a couple of quick prompts here.
Rapid insights as we get to the end of today's episode. Folks, I want you to pay attention to your barley sales. Feed barley sales specifically. The market is showing signs of change here as we enter the growing season. And so feed barley markets are changing. I want you to pay attention to this. A lot of barley going in, not just in Canada, but a lot of barley going in globally. Okay? So just hyper alert on what you're doing with your barley marketing. I like setting targets in the mid range of the rally we've had over the last month or so.
Not the top of the range, not the bottom of the range, right in the middle. And then, of course, I like being a bit patient on wheat. Kansas City showing some life. And it looks like I might have to call my.
Call my broker here, Q and change my thoughts on my short on my. My wheat market.
All right, I heard the buzzer there, folks. I did get one more last question. Any thoughts on the oats chart?
Is it too thinly traded that a guy should just ignore it and base decisions on cash price?
Quinton, you. You handle the oat chart at all in. In your line of work at the O chart?
[00:18:45] Speaker B: In a minute. I'm pulling it up.
Well, I don't trade a ton of oats.
[00:18:50] Speaker A: I looked at it the other day and, like, the oat grower should have been the most frustrated one in the month of March because the oat futures climbed like 50 cents and cash price went up like a nickel.
We just have too many oats, too many sellers at the current prices. And I'm hoping for a little pop here in the spring, but it's just been a dead market.
[00:19:16] Speaker B: So you can trade oats on the oats. You can trade oats definitely liquid enough to trade it. And it sounds like it's one of those ones that you definitely don't want to separate futures and basis because, you
[00:19:26] Speaker A: know, I just think, like, I actually tried to do something in oats in early March and I couldn't get anything done, but I didn't try that hard. But, man, just think about it. If you could have picked up that 40, 50 cents and then turned your 350 oats into $4 oats or whatever, 375 to 425, like, that would have been a. A nice little.
A nice little place. So yeah, thanks for that one, Wheat King. That darn oat market.
Certainly frustrating.
All right, folks, this week's cup of coffee was brought to you by the Lunchbox Crew. We've got a few spots open here for the month of April, so check that out at ryandinnie ca. I'm out of coffee. That's it for this week. Thank you, Q. For joining us. From JGL Capital, I've got Brett Waltz. We're going to talk weather on Friday's what the Futures podcast. And I've got Laura Lee from Fuel Nexus.
They are turning the fuel market upside down here with some great, great strategies. So that's it for me. Thanks, Q. And we'll see you guys all Friday on what the Futures.
