Wheat’s “Poverty Grass” Moniker Is Sometimes Well Earned

It is that time of year again when your loyal scribe drives that great big green monster through my wheat fields.  I started wheat harvest July 18th just about as I expected.  Wheat might be the cockroach of grains, as it is tough to kill but it can be the most miserable crop. I often say, there is always something wrong with wheat. It’s either too dry or too wet and it has a myriad of diseases which can affect it. You can also lose it on the way to the elevator over the grading table. That’s exactly what some producers in Ontario are finding this summer as heavy rains over the last few weeks have caused quite a bit of quality concerns (sprouting, falling number, you name it) in this year’s crop.

I was hoping to finish harvesting my crop shortly after but got chased out from a very violent weather system that went through southwestern Ontario. Apparently, there was a tornado in the area, and it made for some excitement that only wheat harvest can get. With lightning crackling all around me and a dark slate sky, sometimes you only have a few moments to react. As it was, our waterlogged row crops got more rain and so did our wheat. Hopefully next week the weather will be a little bit more cooperative.

Interestingly enough, my foibles in the wheat fields were not the most interesting piece of news last week when it came to our markets. Amid all the raindrops and quality problems here in Ontario wheat country we did see an approximate rise of 75 to $0.80 a bushel in the Ontario wheat price over a three- or four-day time period.  Of course, much of this rise in the price of wheat had to do with what was going on in the Black Sea area.  A bridge is being partially destroyed to Crimea and retaliation against the Odessa and Reni agricultural port infrastructure lit up wheat markets, volatility which hadn’t been seen since the start of the war.

What we saw was a $0.57 move up in wheat on one day. We also saw Paris wheat go up $0.60 on Wednesday gapping higher. This happened mainly because of the shutdown of the Black Sea grain agreement which the Russians would not agree to. It also happened of course because of the live fire in the region as well as some of the wheat speculators covering their shorts in the market. Who knows where the market goes next, but it just goes to show that the continuing war between Ukraine and Russia will continually be a wild card for our markets in 2023 and 2024.

There is much more going on here then drones, missiles, troop movements and the transportation of grain. Simply put, the war risk remains in our marketplace for the immediate future and will continually be a wild card. It jumped off last week and it might jump off again. Earlier this week the Ukrainian defence ministry said they considered all ships traveling to Russian ports or Ukrainian ports controlled by Russia to be potential carriers of military cargo. At the same time the Russian government warned that ships heading to Ukraine ‘s Black Sea ports could be considered military targets. Obviously, none of this works from a risk management perspective, especially those that are doing the insurance underwriting.

It is all so horrendous.   War is like that, and it is surely playing out in some parts of Ukraine. Meanwhile, of course, we know that there is war and disease in other parts of the world like Syria, Myanmar and parts of Africa, but the west yawns.  The war in the Black Sea will surely continue into the future with no winners.  Our agricultural marketing world will simply have to adjust permanently to the new reality.

At the same time while this is taking place in the market, in Ontario we’re trying to harvest what is to us a record crop of 1.3 million acres.  Yes, it has been challenging and the 2023 experience will likely reconfirm the notion that wheat is the riskiest crop you can grow.  It is the only crop that we expose to four different seasons and then those quality concerns can take it all away from you at the end of the day. Needless to say, if it wasn’t for those beneficial soil conditioning characteristics with wheat in a crop rotation, wheat growing in Ontario would decline.

It is such a long and winding road when growing wheat.  I am always reminded that wheat is either planted or harvested somewhere in the world every month. That is partly why the price of wheat never gets very high because there is always another player that is able to satisfy a momentary lull in supply.  In fact, you could say there is wheat everywhere, all the time, of every colour, hue and grade.   At the same time, is it the most miserable crop?  Let’s just say when I make that last pass with the combine, I won’t be missing it much.  It’s “poverty grass” moniker is sometimes well earned.