Episode Transcript
[00:00:00] Speaker A: This week's cup of coffee is sponsored by Land for Rent, built for farmers who want to grow. Check that out. Land4rent.com and they did change the platform on me. I'm going to go and see if I can find Brian backstage here.
There we go. Brian? Brian, are you there?
[00:00:19] Speaker B: I am here.
[00:00:20] Speaker A: Perfect, perfect. We've got canola down about 10 bucks a ton here this morning, trading at 734.
Now we've got beans down, soybeans down about a nickel here. Bean oil actually suffering more loss than canola down just about what, couple percent here. Penny and a quarter. Actually, let's refresh canola. I just refreshed the screen. Only down seven bucks now. So there we go. We're already in recovery mode. We've got Kansas wheat up a penny or so here. Corn's up a penny after a big sell off yesterday.
And I did not look at spring wheat, Brian. It was up a nickel last I checked.
[00:00:57] Speaker B: It's currently up six and a half. So there we go. That's pretty good.
[00:01:01] Speaker A: Six and a half. We'll take it. Canadian dollars trading at 70 and a half.
And West Texas, I've got 70, 70, 74. So just under $71 barrel. And then I also want to put in here urea. We've got a new low in the urea market for Summerfill.
We've got, I'm gonna say a sub 740 for a, for July. Okay. And so you gotta do, you know, as a farm, you gotta go and do your homework over there. But Josh Linville said a couple weeks ago on the show, hey, these quotes are a little bit high, higher than I expected.
And we have corrected about 40 bucks a ton, 30 to 40 bucks a ton from those initial offers. So just something to keep in mind, if Summerfield is on your mind and it is negotiation time, you can go out there negot and kind of see what, what comes back. It may not be on price, it may be on terms, it may be on delivery, it may be on storage, so on and so forth. So.
All right, Brian, what's, what's going on in, in Winnipeg this week?
[00:02:10] Speaker B: We're not getting as much. Well, we got, we got a big shot last night. We've been getting big shots. But I, I would say compared to the area you're in, are you. Our moisture is wet but not as bad.
[00:02:23] Speaker A: Yeah, that's moisture like it makes grain for a while and then at some point too much, it doesn't anymore. So unfortunately.
Yeah. What do you see in like Prairie Wide with your client base.
You work with lots of farms, of course. Brian with Ireland, Como lafoy How are the conversations going? Are folks quite optimistic? Are on crop conditions or are they starting to turn the other way now or they're less optimistic on yield?
[00:02:53] Speaker B: I think there's still some optimism out there because you're right, rain does make grain and you know, there is lots of vegetation in the crops that, you know, have come up and, and are doing well.
So, you know, I think a lot of the conversations now are turning towards, you know, fungicide application and, and even just kind of watching the way the markets are and you know, seasonally we're seeing some normal seasonal patterns in markets and things like that. And so, you know, you mentioned you were doing a strategy call later this week and you know, the strategies that were executed before the downturn I think look really good. So I think that's offering some kind of relaxation, I suppose, with what's going on.
[00:03:44] Speaker A: Yeah, no, that's a good comment. It's weird. I don't know how you feel today, but I, you know, like we get these acreage numbers, the markets move, but you're, you're, you're moving, you know, pieces on the, on, on the game board and, and you know, kind of anticipating something like this and putting the pieces together to, to participate and, and kind of activate your next strategy. So it's been a busy, the busy couple days here for sure. The Lunchbox crew, we do a Sunday, a Sunday evening crop ratings within the group. So of course we're not evenly spread out across the prairies so that you got to keep that in mind.
But three weeks ago, you know, very high good to excellent category. Then it dropped the second week, a significant drop, I would say, in the good to excellent category. And then it rebounded this Sunday. So we had a, a big climb and so some optimism there, especially in Saskatchewan and portions of central Alberta as well. All right, buddy, I'm going to pull up the stats can numbers. I don't have any news here today.
Of course we've got USDA report in a couple of hours and we have, you know, the dome of heat, dome of doom or whatever that thing is coming in the US as well. So we're going to trade weather, but let's, let's take a dive here into stats can I'll let you kick us off on where you want to start. I, I'm sure it's faba beans. I'm sure that's what you want us to pull up first. But.
But I'll let you start.
[00:05:13] Speaker B: Sure. I think the. The. The number that the market, you know, in Canada here at least, was most focused on was. Was Canola. And, you know, that number actually came in significantly higher.
It was reported at 23.4, you know, rounding. The average trade guess was 22.8, you know, although I. I guess I'll state, you know, in Canada, the average Trade guess is 11. 11 people who submit numbers. That's not a whole lot. So, you know, the. The, you know, the accuracy or the statistical, you know, relevance is a little bit. A little bit in question, which may be seeing why we're. You know, I would call today's reaction a bit muted. Like in past years, this would have been a really bearish report for Canola. You know, I think that the discussion will now turn to how many acres didn't get seeded. Right. Because generally speaking, this.
The survey for this report is done, you know, mid May to end of June.
And so, you know, mid May, there might have been a little bit more optimism. Even at the beginning of June. There might have been. Yeah, that faded. But, you know, having said that, I do think that, you know, there's. There is one thing to keep in mind, I think, is that not all of the areas saw a decline in planting and the profitability of canola was so good this year that there's a lot in the fringe areas, you know, the areas that would normally be in the drier areas where they would kind of avoid it.
But so there's. That's probably where you're seeing the biggest increase in acres is probably in some of those areas that, you know, are generally not big. Canola areas like, you know, like, let's say the. The 16 highway area.
[00:06:52] Speaker A: Yeah. Southwest Saskatchewan, you know, big, big increase in acres there and the precipitation and the weather to kind of go with it for now, too. So. Fingers crossed. Knock on wood. I had a meeting with a guy in Swift yesterday, and he said 10 years, Ryan. It's been 10 years since I've felt this good about my crop, so I'm not gonna. I have a solid wood table here, guys. We're just knocking on all the wood we can for those guys Now. My number was closer to acres. That's where I was where I was thinking. So I was a little bit too high on my estimate. But I think the point that I want to make here as well, at 23.4 million acres, there's a lot of variance in ending stocks even for this crop. This last crop year. And moving forward, it's not overly burdensome, it's not super snug, but it's also not overly burdensome. It's a very comfortable number. And then if you start to shave off a little bit of yield, which, which I have, I started to shave off a little bit of yield from, from expectations here, you know, it can, there is a scenario where this thing can tighten up. Am I, am I out to lunch? Are you seeing something, you know, more bearish or bullish on the ending stocks for Canola into next year?
[00:08:08] Speaker B: No, actually we, we kind of think that the, the big ending stocks that are, you know, are predicted at least for, for this 2025 crop year that's coming to an end here. I think it'll correct itself into next year. And you know, there reasons for that. You know, I think the big one is the increase in, in crush capacity that we've seen this year. You know, the COPA is now, you know, putting Crush capacity at 16.4 million.
So that opens up the door for a lot more crush. And the margins have been absolutely fantastic for crushing. There's a whole lot of incentive to crush as much as possible.
And I think as the, you know, bugs get worked out of the, of those new crush plants, you know, we could see, we could see that running pretty significantly. You know, normally I think we run about 88% of full capacity. So if you take that 16, 4 and divide it by or multiply it by 0.88, I think that's probably where your crush number a good place to start your crush estimates at. And yeah, so that's going to suck up a big chunk of it. You know, what, what is left?
I mean we had a big problem with exports this year obviously because in August China slapped us with the trade issue there. But I think that's been resolved. So I think whatever isn't crushed is probably going to get exported and I think that there'll be a big correction in the ending stocks for 2026. I also think that the number in and of itself, once you get into I think the stocks to use ratio will be important as well because you know, what 1.5, you know, was kind of comfortable. 1.5 million tons would have been comfortable a few years ago.
You know, with the, with the crush capacity that we have now. 1.5 might start feeling quite a bit tighter. And you know, anything sub 2 million
[00:10:00] Speaker A: I would also add to just to maybe wrap up Canola is that, you know, the behaviors here across the prairies like we're seeing we're seeing some, you know, some basis specials or premiums pop up. We're seeing, you know, a. Well, I don't know. I think I could list six different companies that are putting their hand up to buy Canola right now as well. Like where the, you know, it was a big scary carryover number back, you know, last year, potentially for this summer, but it's tightened up or at least the behavior seemed to be representing that.
[00:10:34] Speaker B: So.
[00:10:34] Speaker A: Yeah.
[00:10:35] Speaker B: Yep.
[00:10:35] Speaker A: Even if we have a bad couple days here, maybe a bad week, Brian, it's not. Doesn't seem to be all doom and gloom for Canola over the next little while.
[00:10:44] Speaker B: Exactly.
[00:10:45] Speaker A: All right. Spring wheat, that number came in 18.066 million acres. The, the spring wheat rally. The wheat rally must have come just a little bit too late for many growers. They. They wanted to get that barley in instead.
[00:11:01] Speaker B: Yeah.
[00:11:01] Speaker A: Is that number surprise you at all? We're basically going back to the same acres that we planted back in 2022.
[00:11:08] Speaker B: Yeah. No, you know, the wheat was a real struggle for marketing this year. You know, as far as profitability goes. Spring week, you know, Even, even the versus expectations was 800,000 tons or acres below expectations.
You know, the market is reacting this morning. It is overperforming. Minneapolis Wheat is overperforming the other wheat classes. So obviously there is some, some surprise getting, getting priced into the markets this morning. On the spring wheat side, Spring wheat had been, you know, futures had been underperforming up until now, and we kind of needed, we kind of needed a bit of a bullish report in order to keep Minneapolis Wheat's nose above, above water because it was really getting. It was really getting hammered.
So, you know, and the bulk of the miss was in. In spring wheat. You know, there was a miss versus expectations on Durham, but only about by 100,000 acres. So I think this was a surprise to the market and it's supporting it a little bit, even though the weather, I think the weather was pushing it down.
Us traders don't necessarily look at the. Out the kitchen window of Canadian farmers. They just look at the rainfall and say, oh, the rain is overperforming. We'll sell this along with the rest of the wheat complex.
[00:12:23] Speaker A: Yeah, I'm happy to see that action today because I ended up doing a bit of a spread play last week where I bought Mini and sold kc and I was getting beat up on it. So I'm happy to see that turn around. I would also add with the wet conditions, the wheat crop, I have PTSD from Fusarium on our farm every second year over a six year span. So I have quality concern issues when it comes to moisture. So I still have to work through that in therapy, but we'll get there.
So I'm a little bit curious about that. But with the rain, you know, farmers are sending me pictures of their wheat crops and you know, the barley crops yellow beside it, the wheat crops nice and green.
I don't know, we'll see how it all shakes out at the end of the day, but it's handling it a little bit better. And then of course, you know, there's a bunch of wheat being harvested across the globe right now. It may not be spring wheat, but that does play a factor. Yeah. All right, that's our two big ones here. Where do you want to go next?
[00:13:27] Speaker B: I think, you know, the barley, the barley number is big this year and you know, we did see some decent spring pricing and if, you know, if yields were similar to last year, there was probably some good profitability in barley. So, you know, I think if we can get the yield in barley, it'll still be a good year despite the big rise in acres. But I think that that number will, will give buyers a little bit more comfort and they may not bid up barley in the, in the short term here. So it could be, it could fade the price a little bit on the cash side until we get into, until we get into harvest. And you know, the, the malt, the malt spreads have really collapsed. There's not a whole lot of, of advantage to, to selling malt right now. But you know, there's been lots of advantage or there's been lots of opportunity to sell barley this, this spring. And, and I think that's locking in some good profits despite these, despite this kind of over overestimate of, of barley acres.
[00:14:31] Speaker A: Yeah. So acres up about 10%.
And like we've, you know, this is a 10 year chart from Statscan.
We've seen higher barley acreage in the past. You know, that's that span of 2019 to 2023.
Yeah, it's a bigger number. You know, it's not, certainly not bullish, but it's not as bad as I thought. I thought it was going to actually be bigger than this. That being said though, again, from a feed side, a domestic feed market, you've got lots of grass growing out there. You've got the recipe for producing a bunch of stuff to feed animals here. We'll see what the export business does. But I think China's had some quality issues as well on some of their crops, some of their wheat crops. So maybe they'll have a bit more a domestic feed this year. So, yeah, I, I was out of all my crops, I think barley, well, barley and canola. I was kind of the most aggressive on here the last number of weeks. And yeah, I don't think that's a bad thing. I think the malt guys could see a bit of a premium here just based off quality. But again, that's going to take time and, and you got to figure out what that premium is against your feed price. So, yeah, it's going to be a bit of a slow grind in the barley market over the next little while here. I would think so.
[00:15:50] Speaker B: Yeah, yeah. And I mean, acres, you know, kind of focuses on the supply side of the balance sheet. But I mean, if we can. Exports this year of barley have just been like, outstanding.
And if we can keep that momentum going, it'll suck up a lot of this extra, extra production potential.
[00:16:07] Speaker A: Yeah. So I want to turn our attention over to peas now because peas may be setting up to be a little bit of a.
A sleeper crop here. At least farms would want to hear that because again, profitability is kind of suffered. But I, I was looking at, so the p. Acreage itself, like, we were very, very close to this number in 2023, 3.029 million acres.
2023, we were 3.047. But you actually have to go all the way back to 2011 to find a smaller pea crop. And so, you know, obviously price action kind of dictating. And it's funny because on social media, on X, you know, you hear or saw a bunch of people saying, well, fertilizer so expensive, I'm going to put more, more pulses in. Well, they, they didn't, you know, lentils also significantly lower than last year, down about 10%.
The pea crop down what, 15 or something like that? Maybe a bit more. Again, it's going to come out of greens, it's going to come out of maples for the most part. A lot of yellows as well. I haven't dived into the report to get the spread yet or got any context around that, but, you know, it looks like a small pea crop and, and peas don't like moisture, Brian. They do not like moisture.
And so it looks like things are tightening up on the pea side here. Anything you want to add to that?
[00:17:30] Speaker B: No, I think you're right. Like, you know, we were kind of advertising peas as the sleeper crop, but it is difficult to sell that Idea because it's hard to hedge. Right. So you really have to bank on crossing your fingers and hoping for better prices. I think this is a bearish number for peas. It might take a little while to manifest itself in prices.
[00:17:53] Speaker A: Bullish number you mean?
[00:17:55] Speaker B: Yeah. What did I say? Bearish.
[00:17:56] Speaker A: Yeah, bullish.
[00:17:57] Speaker B: Sorry.
[00:17:59] Speaker A: What about oats? Do you have any thoughts around oats? The smallest or similar acres to 20, 23, basically. So a three year low on, on oat acreage.
[00:18:07] Speaker B: Yeah, I do. Like as far as yield goes, oats was a really good yielder last year and you know, you can't, I don't think you can.
You can confidently bank on yields being as high, particularly you know, in the wet, in the wet conditions.
A lot of oats are grown in the very wet areas of western Canada right now. So yeah, I think that that's an opportunity to be a sleeper crop as well. And I think quality will have a big, we'll have a big play in that too.
[00:18:39] Speaker A: Yeah. Oat acres down about 15% and, and again lots of moisture on that crop right now. So we'll see what transpires. And we have carryover. Like there's oats carried over. It doesn't matter what anybody tells me. There is oats being carried over this year and you know, price, the Millers didn't do anything like they tried, they tried to buy organic oats in the peace country. Like I did see a program come out right before seeding that did buy some organic stuff. But other than that, man, they told everybody to walk away from that oat crop.
Unless you're, you're getting that 150plus bushel per acre and you're comfortable with that budget, then yeah, you're going, you're, you're going to stay in the oats. But for many farms that just isn't quite achievable. So those acres, you know, went on the move. Lentils, same thing. Lowest acre since 2023.
Still plenty of lentils went in.
But you know, if you look at 10 years of history here we've got what, one, two, three years where we planted less, less lentils. So, so it is on the lower end of the 10 year range.
Again, I think, you know, large greens. Obviously people kind of left that market and I think weather is way more important when you've got all this moisture on that lentil crop in Saskatchewan.
Like we'll see, we'll see where it goes. But lots of fungicide being, being looked at and booked and, and yeah, we'll see how this plays out over the next few weeks. If it dries up here, then, yeah, we're probably laughing and potential is great, but if it stays wet, that crop certainly doesn't appreciate that.
[00:20:21] Speaker B: Yeah.
[00:20:21] Speaker A: Anything else off of stat scan today, Brian? I know we didn't get a chance to look at maybe revisions and different classifications here, but anything else, we kind of covered the major. Stu.
What am I missing?
[00:20:35] Speaker B: Yeah, like you said, you know, the report was released only a little while ago, so I know I personally haven't had the opportunity to crunch all the numbers.
[00:20:44] Speaker A: Yep.
[00:20:45] Speaker B: But I think those are the major market movers right now. And, you know, again, you know, in an, in an hour and a half or so, you know, the. Today's trade based on these acreage numbers might be. Might be a moot point because, you know, the USDA report is what's, you know, the, the bigger market mover today anyway, so.
Yeah, we'll see what that brings us.
[00:21:09] Speaker A: Well, let's try to. To harness like a positive momentum building number for wheat. Let's just all hold hands in kumbaya and get a good USDA number on wheat so we can, you know, or corn. Corn will do it. Just give me a good number on corn. Print me a good, nice low acreage number. Get that one going, and the rest will follow. So there we go.
[00:21:30] Speaker B: Yeah, I mean, corn sold off so much yesterday that it looks like, you know, that always makes me think that they're overdoing it. But, you know, maybe that's. Maybe that's just my, you know, bias, because I want it to be. I want to feel good about corn for our clients.
[00:21:46] Speaker A: Yeah, you bet. The last one here on Stats can just. I did start us off with faba beans, Brian, but I did look at this number. Lowest faba bean acreage since 2016.
I read an article the other day kind of hyping up the faba bean market and, and the excitement around it, and I was like, o check those acres. And that message did not translate. 10, 10 year low on faba bean acreage. So there you go.
[00:22:10] Speaker B: There we go.
[00:22:11] Speaker A: All right. Well, as we get towards the end of the show here, we've got Canola down about eight bucks. So certainly, you know, a number that was anticipated and, and certainly not scary. Is the chart breaking down for you yet, Brian, on canola, or is it. Do you find it's kind of holding some support here and.
And leaves you a bit more optimistic?
[00:22:33] Speaker B: I mean, the support that we see on the charts, you know, the low that we saw on the 19th June 727.90 is where that is. It's not a very strong support level. Yeah, you know, I do think, you know, soybeans or. Sorry, the soybean oil market is not doing well this morning at all.
[00:22:55] Speaker A: No, it's down over 2% now.
[00:22:57] Speaker B: Yeah, it is testing the same kind of support.
So Canola, for all intents and purposes, is overperforming soybean oil today. And so I don't know that, you know, I do think that there is, that there is some, you know, some good things happening in Canola and I think a lot of it has to do with. On the demand side.
[00:23:16] Speaker A: You bet.
You know what, I just, I just found the chat button here once again as well. So we got, we did have a couple questions come in. So you got another minute or two.
[00:23:25] Speaker B: Absolutely.
[00:23:26] Speaker A: Okay. We're over time, but Riley's asking, will the carry out on peas fix itself in one year? We have old crop green peas contracted for March, April that still haven't gone out. And green pea and yellow pea price is the same right now. Brian. For old crop, like pretty much the same around the $9 level is what I was seeing. So Riley, in the past it, it has fixed itself pretty quick again. We need to figure out what those carryover numbers are going to look like. And the buyers, even though some of the tariffs came off, it's like the buyers stayed kind of away for green peas. So it does tend to fix itself pretty quick in my experience.
Maybe not to the extreme that you want to see for that premium for those green peas, but the market acts fast. Like people are like, I'm going whole hog green peas or I'm doing nothing.
And so it can correct itself. And now we have again, let's keep an eye on the weather and quality and all that stuff out there as well. So why don't you give a quick plug on where people can find you on YouTube and where they can get your, your content?
Sure.
[00:24:37] Speaker B: On, on YouTube. You can subscribe to us at Canadian Ag markets is our handle there on YouTube. And we haven't got quite to the 1500 level. Ryan.
I also.
[00:24:50] Speaker A: You're cruising, though.
You're cruising.
[00:24:52] Speaker B: Yeah, you shouldn't stop the subscribe, you know.
[00:24:55] Speaker A: No, that's it. We made it.
[00:24:56] Speaker B: Oh, yeah. I think Western Canada needs some more, more exposure in ag markets and I think that's, that's starting to happen and I'm really happy about that.
Yeah. And then, you know, obviously we do, we sell a subscription service as well, which we always link what that is in our, in our YouTube show notes. So, you know, we, we hold back a little bit of our, of our information for those subscribers.
Yeah. You know, which if I seem vague on some of these, on some of these, that's, that's probably why.
[00:25:27] Speaker A: Well, there you go. If they want the, the goods, they know where to go and find it, so.
[00:25:31] Speaker B: Absolutely.
[00:25:31] Speaker A: All right, folks. Well, I, I just want to put a, one final thing out there. You know, I've talked more about contract buyouts or you know, strategy around managing risk on sold grain versus anything else this week. There is an area of heavily concentrated precipitation and it is part of the discussions out there. I don't want to say that it isn't. But before you go down the bio route, you know, it again is very emotional right now. There's lots of things happening. It's very stressful and I understand that, you know, you can have conversations with your buyers and, and kind of lay that out on what your concerns are.
But in the growers I've been chatting with, they have sold crop at quite a bit higher values than where we're currently at. And Brian, you got any recommendation if you're in that position, anything you'd consider instead of a contract buyout?
[00:26:23] Speaker B: Yeah, I mean, I used to work for one of the big grain companies and I would say when, when customers were stressed and buying out of contracts, it ended up hurting them in the end. If you are going to buy out of a contract, at least, you know, most of these companies will charge you a fee to do it. And I think that's a big, a big problem on any of the exchange traded commodities like canola and wheat. You know, you can, you can do things with, you know, with calls and things like that that can help. So you know, again, I think the odds, the odds of you benefiting from buying out of contracts is lower than what you might think.
[00:27:00] Speaker A: And what you don't want to see is an exit of a contract that in some of these cases yesterday we're talking about A$120, A$50 a bushel. Don't give that up. Keep that in and there's other ways to protect yourself. So good job there, Brian. Great point. This week's cup of coffee was brought to you by Land for Rent. Find new acres, manage every lease in one place. Skip the paperwork headache. Landforerent.com Transforming how farmland is rented. So appreciate their support here for the entire month of June.
I'm going to be at egg in motion in a couple of weeks hanging out with.
For. For the week. Going to the Hanging out with Brett Young on the Wednesday. We've got free T shirts. We've got sticker books. We have a like a kid's zone. If you got the kids with you, come hang out with us. We got a spot for the kids. We have. I think we ordered almost the same amount of kids T shirts as we did adult T shirts this year because it. They're that popular.
So make sure you come and say hi at Egg and Motion. Yeah. And we'll see you Friday on what the futures. We're going to talk about the Crop Marketing Made Cool Conference, which coincidentally, Brian, you're going to be at in Brandon, Manitoba, later this year.
[00:28:09] Speaker B: In the middle of winter.
[00:28:10] Speaker A: Yep. There you go. All right, folks, that's it. Thank you, Brian. Thank you, everybody. Take care. We got USDA coming up here in like an hour and a half.
