Episode Transcript
[00:00:00] Speaker A: Chuck Penner, friend of the show here at what the Futures, joins me this week to chat about seasonal trends. Seasonal market peaks, left field commodity research has been hard at it. Looking at new crop and wondering when do those seasonal highs occur. In this episode, Chuck and I will talk about 16 different crops. Maybe not quite that much, but many different crops. We'll talk seasonal trends, we'll talk about the latest and greatest impacting many of these crops. Even sprinkle in a little Australian weather as well. Let's get into it here for episode 77 of the what the Futures podcast.
Hey folks, welcome to the what the Futures podcast, your quick guide to better farming decisions.
Well folks, welcome into the episode here, episode 77 of course recorded in the UPL studio each and every week.
Of course I've been talking about Egg in Motion. I'll be at the UPL booth for a couple of days dishing out free T shirts. We got hats to raise funds for the ccaw. We got lots going on. We also have a little reunion going on at the UPL booth as well. So excited for all that coming up here in July. But I also just want to turn your attention here to a product called Wave.
All right, Wave is a product that is basically there to help fortify your plants for improved uptake and resiliency in stressful events, stressful weather events. So stress less this season, talk to your UPL rep about a product called Wave. All right, folks, Chuck Penner this week, friend of the show. Always great to have Chuck on. We went, we went long. This is a whopper. We went through quite a few different crops. We talked about seasonal trends, we talked about Australian weather. The Aussies facing some drought concerns just like some of you across the Canadian prairies. The weather did get a lot better though, like from a precipitation perspective. Some of you, you will continue. Even me, it's raining as I record. But I'm outside of Edmonton, big drought area, the farm south of Prince Albert, big dry area there right now. But hey, it's, it's May 20th. We got some time yet.
And you know, when I look at the seven day map for precipitation totals, it got a lot better for many of you over the last 10, 7 to 10 days here. All right, that's good. That's a great thing. Now I just, when it comes to crop marketing, what I want to say today before we get to Chuck, what I want to say is that I got a perfect example here of from a buddy, you know, Nathan sends me a message, member of the Lunchbox crew.
But Basically in it, right? In it full on May 17th, 18th and 19th. Like, is there a busier time? Right?
And basically his message is, hey, I have not read anything, listened to anything. I haven't had time to check markets at all.
I just need to know from you, Ryan, is it win, lose or draw right now? Is canola going up, down, sideways? Do I need to make a big decision today? So basically saying, hey, I'm too busy to catch up to anything. Just give me the quick, what do I do here? Do I hold? Do I dump this stuff? What am I doing? And so basically the quick answer was hold a couple of reasons why, so on and so forth. My point here is that you are extremely busy and that doesn't change. You're in the growing season, okay? But I want you if you can, if you have a little rain delay. I know my buddy Aiden South Saskatoon there, he's had a couple rain delays. His planting seeding's a little delayed here. It's great to get that precipitation, but for a guy like Aiden, I know he's been doing this because we've been messaging, but you take a minute, you take an hour, maybe a few hours and just review your crop marketing plan.
Give it a dusted off a little bit here, folks. Just take a peek at it because things are evolving. Prices are changing.
Maybe your yield expectations are already being influenced here. I don't want to say one way or the other, I know one rain doesn't make a crop. I also know that a dry week in May doesn't end the crop either. Right? But maybe there's some things here that you want to take a peek at and just dust off the crop marketing plan and review. You know, hey, maybe I have my seeded acres now. Maybe they, they changed a bit. I can update that.
You know, let's put some yield expectations. Hey, you know, I've had a inch and a half of rain here. I'm man, things are looking a little better than what I expected. Oh, you know, maybe I'll take a peek at yields and bump them up one or two bushels per acre, right? Take a look at that and then from there review your contracts. What do I have sold if anything? Do I have any? You don't have to get to the specifics right away here, but you know, is there anything specifics wise act of God on them or not? Just jotting down some notes. Maybe it's as easy as, hey, do I have some fall delivery booked? How important is fall delivery going to be for me? Cash flow wise? Space wise, you know, how am I doing when it comes to that part of, of the plan and just checking in with your buyers, you know, what do I have sold? Do I have any targets outstanding? Just taking a moment to brush it off. Now what you can also do is just look at that plan that you set up this winter. You spent your winter coming up with, hey, I'm going to sell at certain price points, I'm going to sell at certain times of the year.
Just give yourself a little, how am I doing? You know, if I said I was going to be 20% sold by May 20th, am I there? And if I'm not there, why, why not? You know, what can I do here to get back on plan, get back on course? So my buddy Nathan, super busy, swamped. He's not going to check that crop marketing plan yet, you know, in May 2021 here, but maybe in the next week when he listens to this podcast, he'll say, oh yeah, I'm going to double check and see how I'm doing here. Where I'm at, it's an important time of the year because old crop number one things start to slip here.
Like when I was a grain buyer, you would get farms holding so many bushels back. So what would happen is they'd have whatever in inventory, they'd plant the crop and then they'd go and spray the crop.
Sometimes in between planting and spraying, you'd get a little wave of sales. Or they say, oh, wow, I got a rain here. I'm going to start cleaning out the bins. Or they'd go and spray it and then say, okay, now I can clean out my bins and, and move this stuff off.
You kind of get that, a little wave of that here. And I'm not saying that's going to sink these markets, but you get that. And then you also have the buyers that say, you know what, we're just going to kick the can now to new crop. New crop's only a few months away and you know, we're going to start moving towards those prices. So some of these markets, you know, I look at a green P today versus the fall, you know what's going to happen with those prices? I look at yellow peas, not as significant as greens, but what's going to happen there? We also have canola, right? That's a big one. July up, I think it's 715Nav down at about 680ish. So there's a pretty decent spread there as well. So don't Lose, don't lose focus on that, but also on a new crop. You know, like these markets evolve and change.
You know, the first rain, it's not going to make, make or break the crop. It ain't going to do it yet. But all of a sudden, if you start to string together a couple of rains and of course, remember, you're busy here. So all of a sudden you've planted the crop, you're now going to go and spray the crop. In the meantime, a couple rains have happened, and then all of a sudden you come up for air and it's late June and you're sitting here saying, where the, how did the Canola market lose a dollar here? What, what happened? Or a buck fifty? What, Wheat at seven dollars?
[00:08:17] Speaker B: What?
[00:08:17] Speaker A: I thought it was at eight. Like, that's what happens when you come up for air.
Now, I'm not saying that we're here today, that these peaks are here and you gotta listen to this and pick up the phone and get after it. But it's just something to be alert and be mindful of because once you come up for air, often prices have started to make a move here to the downside and you're chasing a bit. So it's the third, what is it, third week of May here. And this is what I'm spending my time on this week. When you think about, when you think about crop marketing, I think about the strategies here that I may look at implementing when the market starts to make that turn.
When I sit here and say, all right, now, we've had a few rains now, things look good. Maybe, you know, there's rumors or rumblings, I shouldn't say rumors, rumblings of acres, you know, the markets start to decline, hypothetically, we'll say they start to decline.
So what I'm doing this week is I am reviewing the strategies that I can execute with grain companies.
Again, brokerage account as well. If you got the brokerage account, you know, you reach out to your broker this week and say, hey, let's get a few of these strategies dialed up. Let's get a few of these strategies. Maybe let's execute 40 tons of this or a couple of contracts or a small volume. Like, let's get our strategy sorted out so that when I want to pull the parachute here and call it a day and make a big hedge or make a big decision, I know what I'm about, I know what I'm doing.
And so, you know, I, I last, not last week, the week before, I sent out a, a wave of emails And I knew what was going to happen.
So let's say that I emailed six different grain companies and maybe it was Bongi and maybe it was Vitera, and maybe it was Richardson, and, you know, maybe it was Grains Connect, maybe it was G3. And I put an email out to a bunch of these companies and they said, hey, this is the question I want, I, I have to ask you. It's about selling grain, and I want you to come back to me with, with some options. So I said, the question is, you know, I want to sell, I want to sell a hedgeable crop, wheat or canola, and I want to limit my, or reduce or not have a buyout involved. If I can't, if I don't produce this, come back to me with the solution that you have for this question. So I want to, I want to get some of this sold. I want to protect price, but I want to limit my buyout exposure or reduce it altogether, eliminate it altogether. I gotta give kudos to my, my buddy Allison that responded and said, you already know the answer, Ryan. And we just have the traditional contracts. We don't have anything that you are referencing here.
We just have the usuals. But the companies that do have them, the, the, the Cargills, the, the Bungees, the Viteras, I didn't get any responses from them either. And maybe it's because it's the what the Futures podcast, probably.
Even though many of them do tune in and they do get the emails because when they're on vacation, it bounces back to me and says they're on vacation. So I know they get them, but nobody responded. And, you know, I don't know, I thought we could have some fun with it. I thought we could go through some fun strategies for some farms and, and figure out how to reduce risk. But anyways, I'll, I digress.
I'll move on. And so even though they didn't respond to the email, I'm still, I'm spending my time here just going through, I, I, I can read, I can go to the website, I can talk to my local buyer. They're fine having a discussion as well. You know, corporate didn't want to jump in here and going through what's available. All right? So that in the next week, days, weeks, whatever it is, I have the strategy ready to rock and roll. Maybe I have one, maybe I have two, maybe I have three. You know, maybe I'm going to do some type of averaging contract. Heaven forbid. You know, maybe I'm going to figure out how to do a minimum price with a put option strategy. Maybe I'm going to incorporate a call option somewhere, I don't know. But I'm going through all the terminology with these companies because the reality is, you know, I might want to execute this strategy. But one grain company, one buyer might have a much higher price than the other. Now, of course, if you have a broker, this is completely different ballpark, completely different and different conversation. So that's what I'm spending my time on this week, just reviewing those strategies and getting ready to execute. All right, folks, let's get into it here with Chuck Penner of Left Field Commodity Research.
[00:13:03] Speaker C: All right, folks, I've got Chuck Penner with Left Field Commodity Research joining me here once again on the what the Futures podcast, Check.
[00:13:09] Speaker A: How's it going this week?
[00:13:11] Speaker B: Well, it's a little, it's unexpected non travel. So that was so I'm back at home in the office and working my little tail off here. So that's good.
[00:13:22] Speaker C: Yeah, I thought we might have a little different background today, but hey, it's all good.
[00:13:27] Speaker B: Just to give you the, I'll give you the travel tip, I'll give your listeners the travel tip today when they tell you that you should have six months till your expiry before you travel.
Some countries actually mean that.
And so I was supposed to travel. I was supposed to be in Singapore and my travel expiry was four days less than six months and I couldn't get on the plane. So that's why I'm in Winnipeg. Not that Winnipeg's so bad, mind you, but it's not Singapore.
[00:13:58] Speaker A: Yeah. That's incredible.
[00:14:00] Speaker C: I, you know, six months, I thought that was just like a, hey, you know, be on, on alert here.
[00:14:06] Speaker A: But obviously. Okay.
[00:14:08] Speaker B: No, I think probably, you know, some countries you can get away with it, but some not so much.
[00:14:13] Speaker C: All right, folks, you heard it there. Travel tips from Chuck Penner. Glad to have you on the show.
Either way, I know it's a little different than what we thought, but, but all good.
Let's, let's keep global here on our the start of our talk, you're keeping a close eye on what's happening in Australia for weather.
[00:14:29] Speaker A: What are you seeing over there?
[00:14:31] Speaker B: Yeah, well, they're getting into their seating as well, too. They work from north to south, so they're getting into their seating as well, too. And for the most part, like starting further north, it hasn't been too bad. But there are a few dry areas in Western Australia.
Actually, in that case, more in the north of Western Australia.
And then when you get further on the east side of the country, you get into the southeast, you get into Victoria and South Australia. And there are some real dryness concerns to the point where it is affecting planting decisions.
So, for example, one of our contacts there was telling us, yeah, the canola should have been in the ground already. And so they're starting to back away from planting. Canola. That's kind of interesting. I think a bears comes out with its next estimate in the beginning of June, sometime early in June. So I don't know if it's going to reflect that or not yet, but we'll see whether some of those acreage changes have happened. One of the areas where it's driest in Australia is where they grow lentils. And so I don't know if that means they're going to stick them in anyway because they're a drier weather crop, but they are, they are getting quite concerned about that already, about the, the impacts on yields. Even though still in the, in the south of the country, it's still very much the heart of their planting. There isn't much rain in the forecast either. So that's, yeah, that's the other big issue.
[00:15:58] Speaker A: So, like, would they do like, like.
[00:16:01] Speaker C: Here where, you know, I heard the other day around the farm, a few farmers had stopped planting, waiting for some rain.
Is that kind of the same thing in Australia or is it. Can they wait a little longer or would they just start thinking about making a switch to something else?
[00:16:16] Speaker B: Well, they certainly have a much wider planting window than we have, so it is actually something that they will do. They will wait. But if it, if it is still dry, like a small seeded crop like canola, you know, they might switch. I don't know whether it goes into barley then instead, or, you know, maybe wheat. I'm not sure. Like, those might be the, the trade offs if they're going to switch from one thing to the other. So, yeah, they, yeah, they don't have to worry about a frost at the end of the season. It's just going into dormancy. So there's, there's more flexibility for them. Yeah.
[00:16:47] Speaker C: All right. So I saw a tweet, not sure if it was a farmer in Australia, but just talking about the dryness and the concerns there.
And then right below that, I saw a tweet about drought on the Canadian prairies. So kind of, you know, similar themes on those two tweets. Now, you know, we, we got an inch of rain yesterday here at my place. That's an inch between drops on the deck. But we, we were running the sprinkler while it was raining here because yeah, the wife's garden's planted and we gotta, we gotta make something out of it. So the sprinkler's on. But pretty active weather this week across the prairies. What, what's top of mind for you from a weather perspective here?
[00:17:29] Speaker B: Yeah, I mean, I'm not gonna deny that there, there aren't dry spots. I mean we were, we, we were one of them. Like we're in, I'm in Winnipeg and, and we were very, very dry. And then last week we got, had the rain gauge out and we got an inch and three quarters and most of Manitoba was again pretty dry. Getting pretty dry. And so it's almost ideal timing for the crop is all is basically in the ground. So it's just, you know, just perfect, perfect timing. But no, there are areas, you know, up around PA I think is one of the, one of the driest areas and you know, Edmonton area up into the peace, there are some dry areas there, but for the most part, even some of the areas in southwest Saskatchewan that were starting to look a little scary. I was just looking at the seven day rainfall and they did get, they did get a shot. Again, it's not going to suck it up, you know, make the crop or by, by any means, but it's relieving some of those early concerns. So yeah, there are dry areas, no doubt, but I think, you know, for the most part, you know, relatively favorable at that planting time. Just to be clear about that.
[00:18:35] Speaker C: Like it is, it is May 20, right? We're recording on May 20. And yeah, you definitely love and want to see that, that rain when you're getting to the tail end of planting or seeding or just wrapping up seeding. I have to say seeding more because I had a farm text me saying, are you American? You say planting on the podcast all the time. You don't say seeding. I'm like, oh yeah, okay, I'll make the adjustment here.
[00:18:59] Speaker B: People get wound up about the most interesting things, eh?
[00:19:02] Speaker C: I try to mix them both in. I'm like, well, I'll throw a little seeding, maybe a little, a little sewing, maybe at times, I don't know.
But yeah, so you like to see. But it is, it is only May 20th. And you know, when I looked at the seven day totals this morning, yeah, the farmer just saw the Prince Albert where we farm is not, it's not great there. But we also had tremendous drill issues this year and honestly like we'll be wrapped up in a couple days and almost thank goodness because the, the drill delays we would have experienced with some rain in there would have been a.
[00:19:38] Speaker A: Little, a little bit more stressful.
[00:19:39] Speaker C: But you know, I was listening to a forecast for the US Big concerns about dryness later in the summer there. But what the, the meteorologist said was hey, you know, like we're, we're getting a bunch of moisture here in I don't want to say atmosphere. I can't remember exactly how he said it, but he basically said once you start to bring moisture in, it builds on, on itself. And it's his thought was he was starting to, you know, he said I need three weeks yet, but I'm starting to push back the idea of a, of a significant drought. So we'll leave it to them, the experts.
[00:20:18] Speaker B: But yeah, I mean one of the areas too was, you know, that's, that's probably of more concern for us because they grow similar crops is kind of northwestern North Dakota and, and Montana and they were looking quite dry as well too. And again they got some shots of rain. So that's not as big of a concern either. But it's. No, it's absolutely right. I mean, you know, when you get people talking about how we waste all of this water, well, it's basically a closed loop system.
And so you get all this rain and then it evaporates and then it generates more rain. So I'm no weather expert, but it's kind of in my few years of observation that it's kind of what I've seen.
[00:20:57] Speaker C: You know, my message to growers a couple weeks ago is, you know, even though it, it may be dry and you want to hit the brakes on your crop marketing plan, you. Not necessarily to do that, you might adjust how you're going to approach your plan or you might bring in some different tools. But this brings us into our next topic. You know, often we can find a high in the markets during this time. And so I want farmers to just again, maybe adjust. But don't just kick crop marketing to.
[00:21:26] Speaker A: The curb here until it rains.
[00:21:28] Speaker C: But from a seasonals perspective, Chuck, you've done a lot of work on seasonals, seasonal patterns. You update us regularly in your newsletter.
What are you guys working on right now? What are you seeing from a seasonal perspective?
[00:21:41] Speaker B: Well, just from when we look at it from an old crop perspective, we're very close to that. I mean some crops don't have a seasonal high in spring like Durham.
Generally it doesn't it just kind of chickpeas, same thing. It just kind of, from January on, it just kind of fades lower. But a bunch of other ones like spring wheat, canola red lentils, you know, a bunch of them, there are some seasonal highs and we're right around that point now. So, you know, the chances or the history tells us that those markets are about to tip lower. Well, you look at the wheat market today and go, it doesn't look that way, you know, and canola over the last month or two, it doesn't look that way.
But there, there is there just as long term patterns kind of show that. And even when, you know, we were talking about drought and even in 21, 2021, which is like a, it was looking way worse than it's looking right now for the Prairies, 21 was completely different animal. But even then there wasn't.
We were looking at, we're also looking at new crop bids and how they behave seasonally.
And for the most part, most bids didn't start to move higher until early July when the drought was locked in. Right when it was, there was no chance this crop was going to come back. That's only when they started to move higher.
And I'm not betting on a 21 this year. I mean, who would bet on that?
And so we're in a much better situation now. The thing is that that doesn't mean the prices fall off a cliff, but those highs for now, if your marketing window is short, if you're figuring out what to do with the rest of your old crop, you'd want to be taking some action pretty soon. Because if you have to get those bins done before July, like 19 years out of 20, it's going to go lower from here to even in 21. It started to turn lower in spring before it leveled off, and then in July went higher. But so if that's your window, you know, it's, we're getting close to those times and you know, trying to pick the high and whatever, you know, if you want to try that, go for it. But we're getting really, really close to those prices tipping over.
But one thing that we did find interesting is that, for example, like when you compare spot prices, like for old crop delivery, new crop prices, sometimes they behave a little bit differently.
So for example, looking at yellow peas, yellow peas from January to June, they just kind of go basically sideways, the spot price. But the new crop bid actually has a bit of a seasonal high a little bit later on. And so it tends to keep rising during that same time, while the spot price remains flat, the new prices and then you see it convergence. Those prices converge because that's what happens at some point, prices converge and, and most times it's because the spot price drops toward the new crop price. So if that's your floor, if those prices are really close together, you know, if there's 50 cents a bushel difference on your. On your spot versus new crop yellow P bids, you're probably not going to see a huge drop. You know, that's.
I'm not going to say that's a floor, but it's.
The new crop tends to be a much more cautious bid.
Buyers are much more cautious because it's more speculative or let fewer knowns and those kind of things. So it tends to be their cautious bid. So again, may not be your floor, but less chance of a sharp decline. So that's one way of looking at it as well too.
[00:25:32] Speaker C: Yeah.
What about when you're looking at new crop bids from a seasonal perspective?
What about something like a red lentil or flax? You guys do any research on those on when they kind of show.
[00:25:49] Speaker B: We did everything. Ryan.
[00:25:51] Speaker C: All righty.
[00:25:51] Speaker B: We got it all.
[00:25:52] Speaker C: All 12 crops, right? Or 25. I can't remember the number.
[00:25:56] Speaker B: Whatever. Anyway, a whole bunch of them, depending whether you count yellow and brown and oriental mustard as separate.
[00:26:00] Speaker C: Oh, definitely all different.
[00:26:02] Speaker B: They are actually.
You jest, but. No, they are. Yeah. For red lentils there is a seasonal high and it's about the same timing for both spot and for new crop. So you see prices in January and then they kind of dip a little bit and then they, and then they firm up and the seasonal high tends to be kind of the mid April to mid May kind of a timeframe. So we are just at that point where it's going to start doing this.
And the thing about red lentils though is right now you're. What's your difference between your old, your old crop and new crop? You know, $0.03 maybe or something like that.32 per spot and 29 for, for a new crop.
So again, not a lot of downside likely. And red lentils could be an interesting crop.
Just going back to our, our Australian discussion. If that crop really is in, in trouble there and they or they don't plant the acres or whatever, you know, red lentils could be an interesting crop going into next year.
[00:27:04] Speaker C: Fair enough. Fair enough. Yep. Before I move on to my next topic though, this kind of. When you talked about yellow peas, I haven't talked to anybody about the tariff situation out of India lately.
Any updates? Isn't there a deadline coming up here right away?
[00:27:19] Speaker B: The deadline at the end of this month.
[00:27:21] Speaker C: Okay.
[00:27:22] Speaker B: So. Yeah, absolutely. And that, you know, that doesn't. You're right, it doesn't get talked about all that much, but partly because it's been kicked down the town. The can has been kicked down the road, I don't know, three, four or five times already.
And so there's that possibility.
What I have seen in some of the press in India is that the pulse traders there are lobbying the government to reinstate tariffs.
And you think, well, why wouldn't they want to trade, Wouldn't they want to keep trading and all of that kind of stuff? Well, they've brought in a whole lot of yellow peas. There's ideas that there's a million tons of, of yellow peas sitting in warehouses that were brought, bought at much higher prices.
And so they don't want any more to come into. They want to get rid of those. They want to sell them and not lose their shirts. So they're lobbying for the government to reinstate tariffs. And yellow pea prices in India are in the dumper. Like, they're not good. Which is, again, would lead me to kind of lean toward that they're going to put tariffs on.
And then, then it gets really dicey for yellow peas because China still has 100% tariffs on. And some people have said, oh, well, maybe we'll have some good relationship with China and maybe Mark Carney can do some kind of magic or something like that with his old friends over there in China.
[00:28:43] Speaker C: Is there any, is there any magic coming that you saw?
[00:28:46] Speaker B: I don't know.
I know that. I know that, that China, when it does put on restrictions, it doesn't tend to take them off quickly.
[00:28:56] Speaker C: Yeah, yeah, exactly.
[00:28:58] Speaker B: Unless you're, unless you're the US and you've got a huge amount of leverage.
[00:29:01] Speaker C: Yeah.
[00:29:01] Speaker B: Canada, not so much. So it's, Is it possible as, you know, the, you know, so the Jim Carrey line. So you're telling me there's a chance? Yeah, sure, there's a chance.
But if both China and India are out of the yellow pea market, we're going to have a hard time, you know, finding big markets that we. That match those.
[00:29:24] Speaker C: Yeah, that's big volume, right? That's huge volume.
[00:29:26] Speaker B: Yeah. I don't know, 70, 80% of our yellow exports. Yeah.
[00:29:30] Speaker C: And we, we did see here.
I, I'm not sure if you saw.
[00:29:33] Speaker A: This as well, but just a few.
[00:29:34] Speaker C: Spots where the yellow pea bits Kind.
[00:29:36] Speaker A: Of perked up a little bit for.
[00:29:37] Speaker C: New crop over the last week or so.
It might be something there that there.
[00:29:42] Speaker A: Might be a chance.
[00:29:43] Speaker B: Yeah, there is. There is a chance. And. Or maybe there's sales being made to Bangladesh that they're okay, they want to get those covered and. And so on.
[00:29:50] Speaker C: Yeah, yeah.
[00:29:51] Speaker B: May not be huge volumes that. That might be the, the sticking point.
[00:29:55] Speaker C: All right, so I want to switch gears here. Oh, I think from. Do you guys do anything on acreage right now or is that later in June now?
[00:30:03] Speaker A: A little bit. Hey, we've.
[00:30:05] Speaker B: We have our opinions.
[00:30:07] Speaker A: Yeah.
[00:30:08] Speaker B: Of, of, you know, what some of the acres will be, you know, for something like, you know, Kabuli chickpeas or. Or even lentils. I think we've got more acres than what Statscan was saying because they did their thing back in December. Right. So, yeah, this next one hopefully will be next STATSCAN report, which comes out in late June, I think.
[00:30:27] Speaker C: Yeah.
[00:30:27] Speaker B: Hopefully will be a little bit better and. And so on. But, you know, like chickpeas, for example, we've talked to, you know, I think Stats can. Said they'll be down 8 or 10% or something like that. And everybody you're talking to down south is kind of going, oh, no, there's going to be lots of chickpeas. So.
[00:30:42] Speaker C: Yep. Okay, so as we're chatting here, I got a text from a buyer and the flax prices. I don't know what is going on in flax right now, Chuck, but I just got a $21 a bushel offer for new crop with act of God.
That number was 15.50 like two weeks ago, then 17, and all of a sudden now I'm staring at a 21. What is going on in new crop flax?
[00:31:11] Speaker B: Well, nobody. Well, I shouldn't say nobody has flax.
Russia has flax, but tariffs, they can't ship into Europe while they can, but it's at a higher tariff. So everything going from Russia into Europe is tariffed.
And so flax is one of those.
And Kazakhstan is running low. Canada is running low. The US Isn't an exporter, but Canada and Kazakhstan are the two other exporters and we have very little left. And so on the old crop side right now in Europe, I think the offer in Rotterdam right Now is over $900 US a ton.
[00:31:55] Speaker C: Okay.
[00:31:56] Speaker B: So there's lots of incentive to try and move, get as much flax assembled, get it into Thunder Bay, get it off to.
Off to Europe.
And the US Bids have been edging higher as well, too, because they're, they're a big customer of ours. So their bids at their elevators are, have been edging higher as well too. It's that kind of a situation. Then when you look at the new crop side, there's all of these people. There's one guy that I talk to regularly says friends don't let friends grow flax.
And yeah, but you know, so you need a little bit of extra incentive to, to get people over that reluctance to deal with the straw or the, or whatever, the, all of those kind of issues. But yeah, 22 bucks.
And part of it I think too is that at one point, you know, for a while we were seeing some 17, $18 new crop bids for flax, but that's when canola was coming up. Some people saying, yeah, well, it's not that great compared to canola, so maybe you'd need to go to 21 or 22 on new crop just to keep that advantage over canola. But I mean, the planting or, sorry, seeding window is closing.
[00:33:03] Speaker C: Yeah.
[00:33:04] Speaker B: And so there's not much, not much opportunity left to do much about it. Now I think there will be more acreage in Kazakhstan. That's what I'm hearing from people there. So they're going to try to increase production and so this will eventually solve itself with decent weather.
But right now it's a very, very tight global supply situation.
[00:33:27] Speaker C: Like, I don't know about you, but I was hearing that farms were switching out of canola way back when and flax was one of those crops that was going to see a bump. Now flax acres were so low last year, like, could they go lower?
[00:33:42] Speaker A: Sure. But you know, a recovery there was.
[00:33:45] Speaker C: Kind of the easy thing to pick.
Are we not going to see that huge gain in flax acres? Do you think that the price just didn't quite do it and that the bump will just be ever so slightly?
[00:33:58] Speaker B: Well, I mean, here's the thing. Well, first of all, Statscan again back in December said that flax acres were going to go down, so whatever.
But you know, we had, oh, I'm trying to remember what the number is now. 350,000 acres or 400,000 acres, something like that.
I don't have my spreadsheet open in front of me. But so even if you, even if acreage goes up 50% and then you get, you get a half a ton an acre or something like that, so you've added maybe 100,000 tons to production. Well, globally that's still not much.
When you look at Kazakhstan, for example, where they are planning on growing 1.1 million hectares.
So two and a half million acres.
[00:34:47] Speaker C: Oh, that's. It's a bit more than us.
[00:34:49] Speaker B: Yeah, yeah, for sure.
And so, you know, we're not, we're not going to flood the market, but, you know, that's not a, that's not a concern, I would say.
[00:34:59] Speaker C: Okay, yeah, I see. I don't know when this is from. I think I've got it as March, but 575,000 acres of flax when we used to do a million plus.
[00:35:12] Speaker B: Oh, yeah, yeah. Well, and you know, here's the other thing is, you know, I don't know that we're going to be again going to be flooding the market and that sort of thing. But that doesn't mean that the prices are still just going to keep going straight line higher either.
You know, 21, 22 bucks is, you know, if you can grow flax and the guys who know how to grow flax can regularly pull off 35, 40, maybe even more, 45 bushels an acre if you really know what you're doing.
If you don't view flax as a, let's cut all the inputs and see what we get. Right.
So at those kind of prices and lower input costs, it's not a bad deal. I do have a bit of a soft spot for flax, just history wise and whatever. I've just always. Yeah.
[00:36:02] Speaker C: So in 2015, we grew just under 1.6 million acres of flax.
And you're right, the last stats can one was lower. 448,000 acres. So again, I think this was from, maybe my screenshot's from March, so who knows?
[00:36:19] Speaker B: That's probably right.
[00:36:21] Speaker C: But yeah, so a lot of room there. Even 20, 21, we had a. Just under a million acres. We hung around the million for five, six years there and then it's been a steady decline.
[00:36:31] Speaker B: Well, here's what happened just in 21 was the tipping point or the turning point because when we had our drought that year, that's when we had $45 flax.
That's when Europe stopped buying from us, that's when China stopped buying from us.
And these farmers in Kazakhstan and Russia go, holy smokes, look at these. Well, I don't know how they say it in Russian, but holy smokes, look at these prices. Let's grow some as well too. So that's when the acreage there really took off.
So that's that we priced ourselves out of the, out of the market. And you could, you could also say the same Thing for mustard, by the way.
[00:37:07] Speaker C: I have a farm that I consult for that they grow 8,000 acres, you know, seven different crops. But flax has just, it's been their home run crop. The last number of. It's a 40 bushel crop for them.
And yeah, I was like late this winter I was like, okay, how can we get more flax in the ground for you guys?
[00:37:27] Speaker A: You do such a good job so.
[00:37:29] Speaker B: Well in average yield. The stats can. Average yield, which, okay, whatever is like under 25.
So.
[00:37:35] Speaker C: Yeah, yeah, yeah, big difference there. Let's jump around to a few other.
[00:37:39] Speaker A: Crops here if you still have a.
[00:37:41] Speaker C: Little, few minutes for us. Chuck, I don't. Do we talk about wheat? Like do we do we just not.
[00:37:47] Speaker B: I don't know, do we talk, do we jinx it if we talk about wheat now?
[00:37:51] Speaker C: It's, it's up a few cents, but yeah. Anything standing out for you on the wheat market?
[00:37:57] Speaker B: Well, you know, here's the one, you know, you've, you've got. Well, I've gotten optimistic about it, you know, a few times and, well, more than a few times and over the last few years and not getting, not getting rewarded for that optimism or that sort of thing. And of course, you know, the global numbers are telling us all of these things that the supplies are tightening so therefore prices should be going higher and all of that sort of thing.
You know what I think has happened in the last little while, it's largely been China has been the driver or the non driver of that wheat market.
So in 24, early in 24, they were buying over a million tons a month. They were importing a million tons a month often and then they dropped to at times in the last few months less than 100,000 tons. So they went from like just these massive buyers to almost nothing.
Now what we're seeing is we just got this morning, we just got their April import data and they imported 790,000 tons again in April. So they're back in the game right now. And it was a, you know, Australia was the largest one, but it was basically Australia, Canada were the only two suppliers to China. And so, and there have been reports about drought there and so on. So we've often talked, John and I have often talked about that there needs to be a weather catalyst in the wheat market that gives it that kick, gets it out of that kind of complacent kind of scenario. And that China thing might be it, their return as a solid buyer. Because if they're buying them a million tons a month, that's 112 million tons a year. That's a lot to take off of the. Off of the global balance sheet when last year they were buying for a little while, almost nothing. So.
So that, I think, is one of the. One of the keys that's happening right now. And then maybe the Australian situation adds to that a little bit, and. Sure, and so on. But the other thing is in the wheat market, you know, we've kind of watched it kind of go lower and lower, but if you stretch it out, if you look at a weekly chart for it and you look back when we had the last loaves in wheat, it was this bowl, or is this dish right, Very low, very slow. And it lasted for quite a long time. And now we're in that bottom of that dish again.
And in the last time it came out of, there was 2020, and then the 21 drought kicked it in gear, and then the 22 war in Ukraine kicked it. And then ever since then, of course, we've been down the other side of the dish again. So now I think we're starting to come back up.
[00:40:38] Speaker C: Yeah, I feel like I'm gonna have to be a bit more patient as we work our way through this bowl. But, yeah, I keep. I look at the chart, and it gives me a little bit of peace of mind. We're like, oh, we're, you know, we've been here before.
[00:40:52] Speaker A: We're at support.
[00:40:53] Speaker C: Like, you know, the worst is behind us now, but then it goes down another 10 cents.
[00:40:59] Speaker B: So, yeah, the worst gets worse. Yeah, yeah, yeah.
[00:41:02] Speaker C: All right.
[00:41:03] Speaker A: There was that article as well last.
[00:41:05] Speaker C: Week about China buying. Some fall, you know, August, September, Australia, Canada, Weed as well. So.
So, yeah, maybe something there.
[00:41:14] Speaker A: That would be good.
[00:41:15] Speaker B: So they've already been, you know, even before that article. Obviously, if they. If they imported this in April, that was that business done a while ago. So they actually got a bit of a bargain. But it might get harder for them to get bargains now.
[00:41:28] Speaker C: Yep.
Yeah. All right.
What about if we switch over to maybe oats? Now, I would call this the dullest crop out there from a marketing perspective, but are you seeing anything different than myself? Like, I see buyers and sellers just meet every single week at the same type of price point. Maybe up a nickel, they meet again.
It hasn't done anything, Chuck. So what do you see in the oat market right now? And what am I missing here?
[00:41:59] Speaker B: More of the same.
Yeah, sorry. You know, the oat market, I mean, the. When we look at the seasonality again, this is one that Tends to just kind of slide during the winter and even into the spring.
There's a little bit of a bump that happens about now, but it's, it's more, it's nothing to write home about, that's for sure. And part of it is, is that the US is of course, is the major buyers. And so as long as they have coverage and as long as they see that there's going to be another crop this summer, they're going to sit on their hands and wait. And so it's not like oats has heavy supplies by any means, but just adequate. I mean, the one thing is too, is when we look at US Imports, they do tend to bounce around, but the last two years they've been probably about a couple hundred thousand, 2,300,000 tons lighter than they normally are.
And so that hasn't helped either. I think they're using more of their own oats for their mills and stuff like that. So I think that hasn't helped either.
But we are getting little bits of business to Mexico and South America that I think when you see a little bit of a special from one of the, not from one of the millers, but one from one of the line companies, they may have a vessel off the west coast that they need to fill. So those kind of opportunities, I think from a marketing perspective, you know, when you see an extra dime or whatever, maybe you want to look at that, that type of a situation.
[00:43:34] Speaker C: Yeah, fair enough. All right, sounds good. You've given us a lot of time this week. Anything else that we haven't talked about yet? Last time you were on the show, it was a whole tariff episode going through that stuff like, I don't know if there's anything new there or is there anything that we haven't covered today that you really want to get out?
[00:43:54] Speaker B: Well, I've probably been more optimistic today than I am on most shows. So here's, here's my, here's my downer.
[00:44:01] Speaker C: Here we go.
[00:44:02] Speaker B: Is we still don't know what China might do on canola seed in terms of tariffs, right?
[00:44:06] Speaker C: Yeah.
[00:44:07] Speaker B: So that's always something to keep in the back of your mind. And there's talk about them taking off the tariffs on, on meal and oil and maybe peas as well, too, and so on.
That's probably more wishful thinking than anything. But, you know, you don't want to go into next year. I think next year is going to be fairly tight, canola wise anyway. Especially if the Australian crop is a little bit damaged and probably lost a little Bit of the Ukrainian crop due to frost as well too.
So, you know, there's some, there's more. It's going to be still be a tight situation, but whether it's just kind of snug or whether it's like really tight, that will depend on whether China is a buyer or is not a buyer. And if they don't buy Canadian canola, they don't have a. I mean they would have to open their borders to Australia with phytosanitary barriers and maybe buy a little bit more Ukrainian. But even there.
So it's a process to make that happen. So anyway, so, you know, that's something that it's not all sunshine and roses.
Might be a few thorns in the Canola outlook yet too. Not going to say it's going to happen, but it's possible.
[00:45:19] Speaker C: Yeah, it's definitely possible.
[00:45:21] Speaker A: What about.
[00:45:23] Speaker C: I think Trump's got it all wrapped up in his one big beautiful bill. But anything on the bio, biofuel side like I, you know, we saw Big Oil and, and Big Ag were getting together and making a plan and there was going to be a bit more demand and then Canola was qualifying.
Now the carbon intensity score improved.
[00:45:44] Speaker A: Right.
[00:45:45] Speaker C: I don't know all the terms, but anything on the US side right now that we haven't talked about?
[00:45:52] Speaker B: Well, yeah, I mean it the latest 45 if you're American Z or if you're a Canadian 45 Z, things about their biofuel use that looks like it is moving ahead.
And the idea is that.
And again this could change yet depending on how that big beautiful bill rolls out.
Right now Mexican and Canadian feedstocks are considered domestic.
Maybe that's another sign of the 51st state happening, I don't know.
But that's positive, I think on the carbon intensity scores.
I think Canola has actually lost a bit of its advantage there, if I'm understanding it right.
So California doesn't have quite the same incentives and we've seen in the last couple of months canola oil, Canadian canola oil exports, it used to be like 95, 98% going to the US and we've been shipping elsewhere now in the last couple of months just because. But credit to our crushers that are finding other markets to do that and not having to kill our canola the futures. Anyway, the basis some areas especially new crop basis still is kind of ugly.
[00:47:14] Speaker A: Yeah, it is.
[00:47:15] Speaker B: And I think that new crop, lousy new crop canola basis is just because there is that risk discount because they're worried about what might happen. Right, yeah. So that's. What's that, that new crop basis looking ugly.
[00:47:29] Speaker C: All right, Chuck. Well, appreciate you coming on the show.
[00:47:31] Speaker A: Here as, as always.
[00:47:33] Speaker C: I don't know if. If you're booking a ticket to Singapore again soon, but I gotta get my passport updated first. Yeah, but, yeah, wherever your travels take you here this summer, have a great.
A great run out there. But yeah, we'll touch base again next month and see what's going on.
[00:47:47] Speaker B: Okay, great, Ryan, thanks.
[00:47:49] Speaker C: Okay, take care.
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All right, folks, positive moments of the week here.
I just want to say that farming during the busy times, obviously there's danger involved.
There's big, heavy equipment. There's long hours, lack of sleep.
It's a dangerous, dangerous, dangerous time and dangerous occupation at times. My positive moments are from a couple of events that happened this week that, you know, they happen and you sit there and think, oh, man, like, what was I thinking? But also, thank God nobody got hurt, right? We had a couple of those here the last week or so on the farm.
And, you know, there's. There's always learnings, there's learning opportunities. You. You always hope that you get the learning opportunity, right? And that nothing more severe happens. Sometimes those lessons are. Are more painful.
Uh, but we had a couple significant events on the farm, and everyone is safe and everyone.
There's no injuries to report. You know, equipment can be. Can be replaced, and obviously there's learnings here as well. And so I hope on your farm as well that those learning opportunities presented themselves and that things that happen could be replaced easily. Material things, but that's what we experienced here this week. So it's just one of those things where you're just. You're thankful that it wasn't more serious than what it is. There's always those little bonehead things that happen, those things that lack of lapse of judgment, you know, things that happen, and you just hope that you get a learning opportunity from it. So we have that for positive moments for this week. My other one too here is, yeah, I've just been in the thick of it here for the crop Marketing Made Cool conference for Moose Jaw. It might just be me in the background, but the excitement here is building. The agenda is really taking shape here, and I. I'd call it like 95% baked in right now, which is awesome. If you want to share or join the excitement with me, you can head over to Ryandenee Ca and apply for your conference ticket. If you've if you were at last year's conference and you've had opportunity to get your ticket again here, we did go through the seating plan as well.
Numbers are going to be a little bit tighter than what we initially thought. So, you know, it's just one of those things. You got to start with the application process. If you're excited to come to Musha, get that part done. Then from there you'll get a link to buy tickets. And you know, I don't expect we'll sell out till later this summer. But yeah, just don't sleep on it too much because there's some fun things going on here in the background. So that's it for positive moments here for this week.
Well, thanks for hanging out here again this week at the what the Futures podcast.
I appreciate it. And if you could do me a favor, go hit that subscribe button on YouTube trying to get to 500 subscribers. We're at 300 and change. And also share the episode with a farming friend, neighbor, colleague.
I certainly do appreciate that as well.
Of course, prices change, strategies change as well. Please seek the advice of a professional out there and I hope you have a great tail end to to seeding that wonderful crop here in 2025. I hope you have experienced a moisture event in the last week or so and look forward to coming back at you here next week. So for episode 77, I'm out.
