This past week the tortured planting season in southwestern Ontario came to an end as the remnants of hurricane Beryl swept through farm country. Your loyal scribe has been waiting to get a bit of a break this spring as each time I plant a crop it seems like it gets hammered by heavy rains. As June ended many of us had thrown in the towel and hurricane Beryl left three inches of rain after that. Thankfully wheat harvest was in between. I’m hoping for some “hot and dry” for the rest of the summer, although the spectre of a normal crop here has long passed.
Who knows where crops might end up as sometimes it’s better than you think. The worst year aside from 2024 was 2019 in southwestern Ontario. A large majority of the soybeans were planted in the last week of June and at the end of the day come fall things were about average. It’s always difficult to know the road ahead.
It was a strange week because of what we saw in the fields. One farmer told me the story while combining wheat, across the way he was planting soybeans and on his other field he was taking it off freshly cut hay. Another soybean seed dealer told me he was moving seed for first time soybean planting while some seed was moved for third time replant. At the same time there was even seed moving to be planted after wheat. It’s hard to remember a week with such stories like this over my long farming career.
As I said in previous weeks on these pages it will ultimately result in lower yields for Ontario crops compared to last year. Needless to say, that is not the case in the United States at least at the time of this writing. The WASDE report will be released Friday and we should find out what new numbers the USDA has in store for us. On July 7th corn was rated 68% good to excellent which was well ahead of last year’s pace of 55%. On the soybean side of the ledger USDA was estimating that 68% of soybeans were in good to excellent condition above last year’s rating of 51% good to excellent. Very clearly, despite all the wild weather in Ontario and Quebec and places like Iowa and Minnesota our American friends are shaping up to have record crops again.
I don’t have to tell you all of this production news in the United States has led to bearish sentiment in the market. Grain markets have really fell off this past week with December corn currently sitting at $4.10 a bushel and November soybeans coming in at $10.67 a bushel. On top of this non-commercial short positions have been growing. Seemingly, there is grain everywhere even though new crop is not yet here.
Keep in mind that the report tomorrow will give us new estimates based on the acreage and grain stocks report which was released on June 28th. We should also within that estimate get some ideas of the number of acres that weren’t planted at the time of the June survey. We’ll also get updated USDA numbers on the estimates coming out of South America. It’s unlikely, we’ll get a bullish surprise. As of now, nobody really sees a heat “dome of doom” on the horizon.
In Ontario Quebec we continue to have one saving grace at a time when many of us have our crops underwater. That is the low value of the Canadian dollar which is fluttering in the 73 cent US level like it has done for so much of this year. This puts a floor under Ontario and Quebec grain prices. Or, putting in another way it could be so much worse with a Canadian loonie rising robustly. However, for the last several years it almost seems the loonie has lost its drive. Eventually though, it will change, and Ontario and Quebec grain farmers will need to adjust.
Bear in mind that this all seems so orderly. It seems like it’s a fait accompli that grain prices are where they are. If you’ve been involved in this business long enough, you know nothing ever really turns out that way. Even though it’s getting into the middle of the summer our crop weather can still pull an anomaly to severely cut yields in places where it matters to the market like the American Midwest. Until that time comes, we’ll just continue to build demand. It’s certainly got cheap enough.