Episode Transcript
[00:00:00] Speaker A: What a week it's been here for the Canadian prairies. The announcement that China placing a temporary 75% tariff on Canadian canola seed. You've got urea values trading north of $900 a ton. And you also have monsoon type rain events rolling across the prairies, wreaking havoc on some of that early harvest. Here we go, episode 89 of the what the Futures podcast.
Hey folks, welcome to the what the Futures podcast, your quick guide to better farming decisions.
All right, folks, welcome into episode 89 of the what the Futures podcast. Of course, you know, we're usually hanging out in the UPL studio, but we do a lot of camping in, in our family and we are, we have a goal of 30 nights and we aren't quite there yet, but we are getting closer each and every week. So this is a fireside chat here. Of course, the smoke coming from the barbecue grill and not from the campfire at this time. All right, folks, it's been a heck of a week here and I have to start off with my emotions got in the way of my crop marketing. This week. I'm going to set the scene here. I'm going to set the stage for just a second. But I had a short on the Canola market. Why? I had a short around 6. There's a 685. I got out of that at 665, shorted it again at 679 and got out of that one around 650. When the announcement comes in from China and the tariff, temporary tariff, I got, I got knocked out and Emotion got involved. All right, Emotion got involved because I went and I shorted it again. I took a little bit bigger position, which is a no, no. And the other thing you should always do.
And Dwayne from Grain Metrics, I'm gonna give him a shout out here, a plug because this is one of his rules. And I usually do this as well. You wait a couple of days. I preach it, preach it all the time. Patience. You don't have to do a quick move, a quick reaction. Well, here I am having made a couple of plays that I'm feeling good about and then from there decide, hey, this thing's going a 5, 660 or 540. I'm going to keep my short in place and I'm going to add to it as well. And got myself in, in an emotional roller coaster here the last couple days. Now, as of recording, Canola's trading around 660. The market is closed. Trading at 660. Well off my low here of what, 635ish, 637, something like that. All right, the smoke's getting too intense here, folks. We got to take a peek now. What's going on in the grill now? We're hanging in. My wife likes things a little crispier. I'm cooking for the entire entire family here. My wife's got her cousin cousins out here with her kids, with their kids. We've got.
Chantel's aunt and uncle are here as well.
And so we are. I'm cooking for everybody. So I've got lots of, kind of, lots of comments and lots of feedback here on my cooking skills shortly.
All right, we got to flip some of these pork chops around. Now. I let emotion get involved. It's something that I, I preach all the time. But I wanted to come, you know, come out and just be honest about it, is that it happens. It happens.
You get caught up in it. And I knew, I knew when I was making the decision that it was not that I was. I was screwing up. I knew it at the time that I was screwing up.
And I thought, well, you know what? I'm gonna just do it. I'm gonna see what plays out. And sure enough, the market does a nice job of recovering. And as of you listening to this, I'm not sure where it will be trading, but confidence is building that the, that canola is, is going to gain here.
All right, and continue its climb. You know, to see the market pull back here this fall wouldn't surprise me. In fact, before the China announcement, the market was setting up for a drop into that 650, 640 range. And then of course, that escalated with, with that headline and with that tariff.
Now, as we look at the market here, it found support. I think 200 day moving average is what I saw earlier in the day today, of course, recording this on Wednesday.
And, you know, maybe with a little bit of luck here, we get a little selling opportunity. Because I put my, my foot in my mouth last week by telling you folks that you're probably not concerned about your canola marketing. I've been saying for weeks here, don't screw up your canola marketing. But I also said you guys probably weren't that concerned about it because it was going to be a forgiving year.
I still anticipate it'll be a forgiving year, and especially with us soybeans that acreage coming in at don't have the stats in front of me, but I think they set a 12 year low from an acreage perspective. Soybeans rallying on this week's USDA report.
U.S. farmers, you know, abandoned the soybean acre. Economics were poor, right? It made sense. They abandoned it. Just like we planted less canola than the trade was expecting.
And so that even gives me a bit more confidence in the oilseed market moving, moving forward.
All right, now I just want to add in here that, you know, I preach patience. Of course I messed it up this week by getting a little bit rammy and getting emotional, but I do preach patience. And if this market is recovering and you're sitting there saying, well, that didn't feel good when it went to 6.35. I felt exposed, closed. Well, now if you're trading, maybe it's 670, maybe it's 680 by the time you're listening to this, you can still do something. All right, I've kept my, my puts in place. I've kept my hedges in place. None of that changes until I physically harvest canola. Then I'm going to make some adjustments from there.
I've seen basis levels improve at your crush plants for fall. It looks like just like wheat. Not a lot of wheat soldiers. Looks like not a lot of canola sold either for fall yet.
So I have seen some basis improvements at some of your crush plants here as well. Not seeing as much on the, on the export side, of course, the China thing, you know, wreaking havoc here temporarily. Now I saw all sorts of things. I saw, hey, well, China's not, hasn't been buying our canola seed for a year anyway. This came from a buyer. False. China has been buying our canola seed. They buy our canola meal as well. And they bought a lot of seed here this last year. So I don't have all the facts in front of me while camping, but I do know a quick little search, a quick little chat GPT search would show you, or maybe go to the canola commission website, show you China's buying some canola seed from Canada.
I did read in here, you know, the supportive folks out there saying, hey, we're not going to have the supply anyway. So China being out of the market, you know, doesn't matter as much.
Okay, you know, it still matters to me. It still matters. But you're right, you know, things are looking very, very tight. But don't forget we still have some US biofuel policy that's still out there and not sorted out by any means here at this time. It got positive. The news got better. The updates were getting better on the development of canola oil into the US here, but it's not perfect. It's more towards the food industry than, than the biofuel industry right now. And you know, it could be more positive yet. So we'll see, we'll see on that one.
So your Canola marketing again, spend some time on it this week.
Review it, make sure you're feeling good about your position heading into harvest. You know, often we get this little rally leading into September, long weekend. I'm hoping to extend sales here just a little bit. I still feel good about my percent sold on canola, but just extending sales one more time before we get into harvest. And who knows what type of harvest we're going to have. As of reading or pardon me, recording this, a huge rain event happening in western Saskatchewan here this afternoon. It looks absolutely wicked out there. All right, all right. So I want to give a quick thank you to, to Mitchell and Justin.
You're going to hear their clips in just a second. They sent in voicemails on the website. So thank you so much. Both of you are entered to win the John Deere wrenches. You took my kids out of the running now, so thanks for doing that. We're going to play those in just a second.
But just a quick story about Mitchell's voicemail. So Mitchell Farms in Glaslyn I believe is the town. And when I was a kid in the 90s, my dad, so my dad's the youngest of 10 kids and you know, grandpa getting all these, all his kids farming it. Obviously it took time, right? We had a mixed farm. We had cows, we had pigs, we had chickens, there was horses, there was other side hustles. Lots of things going on to support all these families. So anyways, my dad in the 90s, I remember I must have been like eight, nine years old, something like that. And there was an auction and my dad, I just remember how important this auction was, how important it was to, to go in and try to buy.
There was a house and a yard and some land and I just remember my parents, it's like their hopes and dreams were tied into this sale and tied into buying some land and you know, getting going from a land based perspective. I remember the stress, I remember the pressure, I remember the excitement. And then I remember the day of the auction and I think the land went to like four different buyers.
You know, the yard site ended up going to my dad's good friend and I guess they became good friends maybe after that, but really good friends for life after that. And.
And I just remember my dad buying, buying one, getting one, and how exciting it was on the farm, how exciting it was, even for me as a kid seeing that progression. And I think they were trying to buy a little bit more than what they ended up with, but they did buy some. And long story short, you know, Mitchell's family was involved with that. Grandparents, I believe, or maybe extended family, but they were selling that farm. And so Mitchell and I are somewhat tied, even though we didn't know it until Egg in Motion, or I didn't know until Egg in Motion. So, anyway, so that's a little story about my. My dad buying some land here and my parents buying land in the 90s in tough economic times.
All right, so let's get to those speak pipes here. And thanks again for those guys. For. For putting those in.
[00:11:25] Speaker B: Hey, Ryan, Justin Kelly at Knife, Saskatchewan, leaving you a voicemail here. Oh, it's experience. Lentils tonight, August 10th. Yeah, I'm quite enjoying your podcast, listening to it right now. And yeah, I guess on another note, if. If you have an extra or if you still have an extra prize package there, I'd be able to donate 100 bucks, if you want, for the Bellevue Care Home. Good chatting. We'll see you later. Hey, Ryan, this is Mitchell Ditilio from Glassland, Saskatchewan, listening to the what the Futures podcast.
One positive that I've brought from listening to the podcast would be developing better relationships with our local elevators, thanks to your advice. Keep her going.
[00:12:10] Speaker A: All right, so again, folks, the voicemail you go to, the whatthefuturespodcast CA website pops up right there. You click the voicemail button. Super easy to send them in. Put your name in there as well. It comes to me, say, hey, Ryan, I listen to the what the Futures podcast. I farm in whatever area. All right, that's all you got to do. That's all you got to say. We're going to draw for that August 29th. There's John Deere wrenches. It's as easy as that. Of course, those wrenches are sponsored by the Crop Marketing make cool conference happening December 9th to 11th in Moose Jaw, Saskatchewan. We're going to be at the Temple Gardens. We've got a bunch of updates coming here shortly. I know you guys will be in the cab here here harvesting. Some of you are already. But we'll be dropping those updates regularly here as we get towards the end of the month and into September. If you want to get your tickets, you have to apply. Ryandani Ca apply to attend the Conference. We'll send you the link to buy tickets and away you go. We have Susan Stroud who's going to be speaking. We've got Dwayne with Grain Metrics speaking.
The list goes on and on. Sarah Kashay from Trigger Grain speaking as well. It's all about crop marketing for your farm folks. We want you to leave with an action plan for crop marketing in 2026 and try not to break some of the rules here.
Implement those rules and try not to break them as I have this spring. All right, let's talk wheat marketing for just a second. I told you that I thought wheat basis was going to get a little bit better. Better and it has.
It got a little competitive out there and I did get some transactions done, posted specials. We went past that, we asked for more and we got it again. This is for the early trains, those early wheat trains, I'd say as of recording this. Viteras, I don't know if they listened to the podcast and said, you remember guys, when I said, hey, you know, you're, you're here to, you've been here, but you're kind of the new kid on the block. So let's go out there and shake some hands and get some business. Well, I don't know, I don't think that helped, but it certainly has transpired for me here this week locking in some of the best basis special or best basis for hard red spring that we've seen in quite some time actually all year for the new, the new crop year. So I've been doing some of that wheat futures trying to show a little bit of life here as well.
So that's been a little bit, well, I shouldn't say exciting. I've tried to will it into existence because it's not much of a wheat rally yet. But it, you know, it's, it's at least it's not going down this week. They're not down much. As of recording I was trying to find a bit of life.
So I saw 760 weed in Alberta for 113.5. That's not that exciting.
But like I said, you have to string together some good decisions and you know, maybe locking in this basis again over the specials. We've been getting eight bucks at six, seven, eight bucks a ton and locking in some decent bases for, for those that need off combine movement. Strongly encourage you to, to take a peek at that. We're trying to string together multiple decisions. So the strategy here was lock in your best basis, capture a little Futures rally. Try to turn this into something around an 8 in Alberta, 750 in Saskatchewan, and then see what the next decision is after that. So not trying to make the moves all at once, but trying to piece together multiple decisions here and get that price climbing higher and higher. All I'm going to say, though, is if you want to negotiate, G3 also came up and said, hey, we want to play. What's going on here? We want to play, too. And so I think there's a little spot here in many areas where you can get some basis action. Again, be cautious, not saying a basis is the best move here and just leaving futures exposed and wide open. Have a plan, execute the plan, and go from there. All right. I also wanted to throw something on peas here. This actually was a Lunchbox crew question. I thought I'd share my response. I also reached out to Chuck Penner, who is the guru when it comes to many crops here grown in the prairies. And the question was, hey, Ryan, what do you expect the yellow pea market to recover to after this winter, after, you know, we get through harvest here?
And, you know, I told the Lunchbox crew, I said, last year, we were 100% sold.
I think it was October 30th on those yellow peas. And I said, this year, I hope that's August 30th. I hope it's as fast as humanly possible. If you're growing yellow peas and someone's offering you over nine bucks in Alberta, mid eights in Saskatchewan, Manitoba, maybe a little higher than that, you know, go and get that secured and get that locked in, because the recovery may be very painful if we have a big crop, which is, you know, it sounds like we're going to produce more peas than we have in the number of. In a number of years.
I'm not convinced the Canadian dollar is going to work to our benefit this winter. And I'm also worried about China and these in this tariff situation. India is buying a little bit here now, according to Chuck, China.
How does that look? I don't know. So if you're gonna store them, you store them. Waiting for a resolution with China. But in the meantime, you're gonna be fighting with the neighbors here. A little bit of movement, demand will pop up, and many will be trying to sell and keep a lid on those prices. So I'm. I'm not willing to hold on to them.
I want to sell them, and I want to use next spring's rallies to lock in prices for next fall. So yellow pea growers, you're on notice here to pay close attention and try to beat the downward spiral of these yellow P markets. All right.
Okay.
What else here did I have for markets this week?
I think we got most of. We talked canola off the hop. We talked a little bit about wheat and yellow peas. Oh, the other thing I'll throw in the mix here.
I know one of my favorite things to do is to move malt barley as fast as I can. So I harvest malt barley, I submit my samples and I execute the contract.
Just a little heads up that we are seeing some early trains, some early demand. Maybe that's a sign for additional demand later on.
But the values have popped up here.
The premium for malt at some of the line companies is about a dollar over over the feed barley price. And for me that is worth considering. All right, so malt barley growers take, take a peek at that.
I did get an offer from a domestic maltster and when I looked at this local price, this line company price, compared it to what I was getting offered from the maltster, it was basically a wash. The maltster's price has to pop up here a bit otherwise it's not, not going to pay to do that. So we'll see. Maybe it will. But the, the quick movement September movement for my malt is one of the things that I really like to focus on. All right, harvest. Obviously some weather issues going on out there.
Are hearing of some early quality questions on Durham, some, some sprouting and in some stuff that's that was laid down or put in a swath. Like lots of rain happening in parts of the prairies. Right. So it's been a, a bit of a struggle from some of this, from some of this quality. Nothing that stands out as concerning. I think the Bertha army worm story this week. I'm watching that because that's a little bit, a little concerning. But from. Yeah, it's, you know, the crop was ready, you got a bunch of rain on it and it just, it's not good for quality. Right. So just something to, to take note of. They're not a game changer story yet, but what's mother nature gonna bring us over a harvest weather, it's starting wet. Does it continue? Because that'll have a play a factor as well. Plays a factor in spreads, plays a factor in grade premiums, discounts.
So stay tuned, Stay tuned for that.
All right folks, we talked conference already a little bit. Just checking my show notes here.
I think we've got most of this covered off all Right folks, positive moments here for this week. Actually I had a really good time at Jake's Jacob's event the other day. I did a bit of a market update. Only one chart in my 45 minute presentation, but it was a good time. Good to get in front of people. Yeah, I'm considering maybe taking on a few more speaking engagements here this winter. I said no to a lot of people last year, but I might, might make some tweaks there. Second, positive moment the week. Finley, of course our two and a half year old, his potty training is going a little bit better here and he had his first big pee in in the big toilet. So that was a big moment. Lots of celebrating at at our place here this week.
Just for eating your veggies for this week, all I'll say is to just spend a little bit of time with your crop marketing plan.
It is harvest time. Just figure out exactly what that looks like for your farm and your business and spend a bit of time and energy. If you get a rain day, just figuring out where you sit for cash, where you sit for percent sold and yeah, just be ready to execute here as you as you know. All right folks, that's it for episode 89 from the campground. Back in studio next week. Lots of great guests here coming up for the harvest run and just putting the finishing touches on the what the Futures Harvest 25 playlist which you can find on YouTube Music. If you like the show, give us a review.
Tell your friends, tell your neighbors. Certainly appreciate it for the what the Futures podcast. My name is Ryan and I'm out of here.
Cheers.
