I was busy walking soybean fields today. It is that time of year when some post emergent herbicides have to be applied before the soybeans start to flower. It just so happens that we have had a bit of wet weather in southwestern Ontario over the last 10 days and it’s been a bit of a challenge even to walk in the fields. I know that walking the fields is not an option for many of you as your fields are way too large but here in southwestern Ontario scouting your fields on foot is still something that’s done all the time.
Thankfully, things look pretty good with regard to my previous herbicide applications. I grow non-GMO soybeans where I split two previous herbicide applications hoping to get things right. I’ll let you know as the season goes by, but things look pretty good for now. Needless to say, I always find myself spraying for volunteer corn, always a problem in soybean fields rising out of the corn stalks.
Of course, this is the night before one of the bigger USDA reports of the year. Tomorrow we will find out if there is 92 million acres of corn in 87.5 million acres of soybeans growing in American fields. We also know that our American friends have had quite a bit of dry weather with crop ratings dropping over the last several weeks. However, we will not find whether yield estimates are dropping until later in July. Clearly though, the historical market action on June 30th has a very violent history. We will see tomorrow whether our commodity markets continued to gyrate based on USDA fundamentals or whether they just continue in this weather dominated market accented by a Derecho yesterday in central Illinois.
In Ontario and Quebec, we heard from Statistics Canada last week regarding the number of acres that we have here. According to Statistics Canada we saw a slight decrease in seeded acreage of grain corn from last year down to 2.3 million acres. Keep in mind that this figure is about as common as you are going to get. There is a finite acreage available in Ontario and we top out at 2.3 million acres of corn at the best of times. Quebec corn acreage came in at 898,300 acres up slightly from 2022.
On the soybean side we have about 2.9 million acres of soybeans in Ontario which is down 5.4% from a year ago. In Quebec we have a million acres of soybeans which is up 4.8% from last year. The soybean number in Ontario is always related to the amount of winter wheat that has grown. As we stand looking into July, we are almost ready to start harvesting that 1.3-million-acre Ontario wheat crop.
After tomorrow there will be certainly much conjecture with regard to where prices will be going for the rest of the crop year. As I’ve discussed in recent weeks the grain marketing narrative has changed a bit because of the weather but we have lost quite a bit on prices over the last week as some wet weather and the promise of more wet weather have chased the grain bulls. I’ve seen it many times in the past where traders in Chicago decide the crop is made by July 4th and we slide in markets right into harvest time in October. Will it be that way this year? It certainly feels that way after the market action of the last week, but still there is so much risk ahead.
Keep in mind that we still have ample old crop corn stocks in Ontario which has had a dampening effect on our Ontario basis values. We must remember that Ontario and Quebec basis values are to some extent a reflection of the crop that is grown in the marketing year. At the present time, that crop in both Ontario and Quebec looks pretty good and it is shaping up to be a possible record year. Who knows how all this smoke is going to affect crop yield as we move throughout the summer? There are those already harkening this summer back to 1992 when it seemed to be cloudy all year setting up a difficult harvest. That was clouds, this year smoke, hopefully it will all blow away real soon.
It’s also important to remember that our geopolitical problems have not gone away. In fact, over the weekend we had the mutiny of the Wagner group in Russia. With tanks rolling to within 200 kilometres of Moscow, we were setting up for some real fireworks. However, you all know the rest of the story by now with the Wagner group stopping in their tracks with a deal cut. With that we continue to have the status quo in grains in the Black Sea. There’s lots of cheap Russian wheat to go around. That doesn’t look to change at least in the near future, and it will continue to affect Ontario and Quebec wheat prices.
On walking through my soybeans today amid the corn stalks I was pleased with the emergence but also quite wary. Let me tell you, I’ve been down this trail before and even though things look quite good right now there is a world of risk in front of me. By extension, there is a world of risk in front of all of us as we head into Canada Day. How we manage that risk going ahead will surely be key to our profitability. It’s no time to get complacent now. Let’s use all this holiday weekend celebrations to reload. The road to payday is now going through one of the most crucial stages.