YOURGRAIN

Agriculture market outlook for Western Canada.

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We have relocated the blog to www.yourgrain.ca/grain-outlook. 

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Wheat holding steady.

While wheat has managed to hold steady as barley demand drops, basis levels could widen on gradeables as movement to export could hit a snag with rail issues. If export prices sag pressure will immediately be placed on the feed side. Main support on the feed side is due to the end user keeping coverage to a minimum, if the market starts to show strength end users will change strategies to get positions covered. Feb 18, 2015

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Barley continues to ease.

Space to deliver into end-users has become nonexistent for February and the first 2 weeks of March. Warm weather has caused end users to become over bought for February and March homes will likely be completely covered before the start of the month. This mild winter could also limit the upside to the usual spring rally which while I believe will still come, current positions could lower the demand heading in. Highs will likely be seen last 1/2 May and first 1/2 June, of course weather and road bans will dictate the timing. If you need to move before road bans DO NOT wait to price, going forward prices will either continue to soften or worse bids will be withdrawn from the market. Feb 18, 2015

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Canola close to its peak?

Canola has continued to strengthen even as the South American soybean harvest has begun. Prices very well could peak at the $465-475/MT on July futures as there is heavy resistance seen at that level. Basis levels had begun to narrow but we could see a wrinkle develop in that area as CP deals with its latest labor dispute. For the past six months I had anticipated delivered bids to be seen around $10.50-11/bu. We have started to hit the lower level of this and if basis levels can get slightly better $10.75/bu should be available. The USD has begun to lose a little of its steam and this could pose a risk to canola pricing which has been propped up greatly by the weak loonie. If you would like to discuss canola or other markets please feel free to give me a call at 1-888-882-7803 Feb 18, 2015

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Wheat sliding:

Wheat continues to cool off as local export demand shifts to other commodities. Aggressive Oct-Nov-Dec buying covered large portions of movement and have allowed basis level to drop with falling futures. Export prices could see a possible bounce if Russia starts to limit exports, however this seems like a remote possibility as a surplus in India and a weak Euro should counter that rally. Feed wheat is following barley as end users feel they have enough coverage to let the market come to them. With the fall in export, plus local coverage expect downside in the market to range between 25-40 cents/bu. 

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Canola thoughts:

A steady decline in the loonie continues to support export markets. Basis levels have widened after $10 targets triggered throughout Western Canada. Demand should return to the market with possible season highs being seen at $470-480/MT on July futures. Basis levels should narrow as springtime restrictions and lower inventories force incentives into the market. Bearish sentiment could start to sway the market if China's economy continues to weaken and if South America maintains strong growing conditions.  

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Cash Barley Market:

Prices have started to soften as large amounts of volume changed hands the first half of January. The market is currently showing a 15-20 cent/bu spread between winter and spring premiums. Downside should be limited by lower inventories with a possible slide of likely not more than 20-25 cents/bu.