I have often said on these pages that we love our American friends. Sure, living above one of the richest and most powerful countries in the world has its challenges, but so many benefits too. I often kid my American friends when there comes to trade disputes between the United States and Canada, we have the ultimate weapon. Of course, that is always the threat of sending cold Canadian air down to the US in winter during a polar vortex.  If there are not guffaws, at least it breaks their attention.  Then came this past week where smoke from eastern Canadian wildfires caused dangerous levels of air pollution in major American cities like New York and Philadelphia.

For eastern Canadians, these smoke-filled days are very strange. However, in Western Canada it is not so strange as we have seen it before. There are often fires in British Columbia and Alberta that send smoke into western Canadian farm country as well as the US northern plains.  However, this year as DTN meteorologist John Baranick documents in his DTN AG weather forum, precipitation in the greater North American corn belt has been below normal caused by a stagnant weather pattern caused by a ridge of high pressure across central Canada. Translate that into the abundance of forests in northern Ontario and Quebec and we’ve got wildfires.

The images are striking especially from the big East coast American cities where pollution levels are considered dangerous.  In Ontario and Quebec comet it’s the same especially near the Quebec border where the horizon is masked by the dull curtain of smoke generated only a few 100 miles away. Yesterday on Twitter I couldn’t help but feel for a friend of mine who mentioned he couldn’t see his grain elevator half a kilometre away. He also said the smoke was causing him headaches.

Here in southwestern Ontario the smoke was not as bad as that, but it was still very evident. Today, almost seems like one of those dull January cloudy days but the temperature is about 23 degrees Celsius and there is a sunup there somewhere. We continue to suffer from the drought that John Baranick has documented.  However, rain is on the way apparently for next week.

That will be a complete game changer for crops in southwestern Ontario if it materializes. Interestingly enough, the Ottawa area has been an epicenter for the smoke in Canada and even though it is always a centre for political hot air you couldn’t help here some politicians explaining all of this away because of climate change.  Needless to say, our Ontario premier Doug Ford wanted to avoid that saying something about lightning strikes causing fires.

The unfortunate part of all this is you cannot deny the tangible reality of air pollution in this situation.  What we have is people being exposed to fine particulate matter which can be highly dangerous when inhaled and can get into the bloodstream in the lungs, possibly causing health problems in the future.  Raising the federal government’s carbon tax to fight this present danger isn’t going to help.  Rain and a good stiff wind the other way might.

In the meantime, you might wonder how all of this dry weather and smoke is impacting the crop in the ground across the greater North American corn belt.  Crop ratings are falling as Illinois’s good to excellent corn rating fell 19 points last week while Michigan and Ohio fell 20 points in 17 points respectively. In the good old days where information was at a premium you would be expecting the markets to skyrocket. However, in 2023 that has not happened, in fact the market has had a collective yawn over the whole thing.  We are expected to find out more from the USDA when they release their latest WASDE report tomorrow.

It really wasn’t supposed to be this way. You might remember some of my musings over the last several weeks that El Nino was supposed to represent opportunity.  Well, at this stage many of us are wondering if that opportunity means some timely rain next week.  We will have to wait till tomorrow, but it is unlikely that the USDA will change its 15.265-billion-bushel corn production estimate in the June report. Keep in mind our Brazilian friends are pushing out a record high 5.12-billion-bushel corn crop this year even at very cheap domestic Brazilian cash prices.

Clearly, on the Ontario front, crops are suffering. Where once dry weather helped us get the crop planted and get it up, it’s pretty obvious when you walk the fields there is an increasingly high level of concern.  However, it’s not hot and dry, it’s smoky and dry which is really weird.

It might be leading up to a crescendo of market making action in the grains. We not only have the June WASDE report on tap tomorrow but we also have the June 30th USDA final acreage report on the horizon.  Then there is July 4th, where often times traders decide the crop is made. Within this dull and smoky horizon there is certainly the potential for greater market risk. However, we are not there yet. The grain market continues to yawn. Seeing clearly has never been so hard.