In many ways it is the nicest time of the year when we experience some of the longest days imaginable.  Often times this time of year, I am busy spraying my soybeans long into the night as the sun seemingly never sets.  Of course, it’s been a bit different this year because as you all know I’ve had a terrible time getting soybeans to come up and for some planting continued into late June.
 
     Markets continued to take a tumble down recently as everybody is piling on.  The Canadian dollar continues to be the saving grace for Ontario cash grain prices. 
 
     One aspect of the agricultural price equation that I often mention is the effect of geopolitics.  We can all remember back to when Russia invaded Ukraine in 2022.  The wheat market took off, of course, it took off because of emotional buying with two of the largest wheat producers in the world going to war. However, over several years we also see how the trading algorithms have that all dialed in.   I cannot even imagine a geopolitical event now which would make the wheat prices go up like they did at that time.
 
     Needless to say, geopolitics are still important but predicting their effect on the markets is rather fickle. Over the last few weeks, we have seen open warfare between Iran and Israel. We also have seen the United States hit Iran’s nuclear sites with bunker busting bombs. When this happened it is entirely reasonable to think that markets might open with some type of emotional buying or selling depending on what the commodity is. However, last week when this happened the markets were muted.
 
      We did have a rise in the price of oil earlier on rumours of war but of course it is falling back now to $65.23 a barrel.  You can understand how oil might be sensitive to military actions in the Arab gulf. However, things seem to have settled down with the American President talking about the past 12-day war and the ceasefire that he helped orchestrate.  For farmers looking for some type of bump from a geopolitical event, it’s been a bit of a disappointment. A true Black Swan is rare.  With our grain markets flush with supply, it would take a true Black Swan to turn this market around in a hurry.
 
      There was more news last week on the world’s political leaders met at the G7 followed by the NATO meeting in Europe. That’s where we found out that NATO allies are looking toward contributing 5% of their GDP to their defence budgets by the year 2035. For Canada, this is a real departure as under the Trudeau administration we had never even reached 2% before. However, there’s obviously a new sheriff in town and along with other western governments there is going to be an awful lot of new defence spending in this world. Who knows what that will mean in 2035.
 
      One thing that it will likely mean is less robust Canadian agricultural policy as money goes into ships, airplanes and who knows what else. A Ministry of Defence always takes up the most of any Canadian budget and with this current vision so apparent it’s pretty obvious to me somewhere along the line taxes might have to be raised.  We’re talking billions of dollars.
 
     Of course, this is looking out ten years in the future and who knows what the world will be like then. I remember very clearly several years ago I was speaking to a local commodity group about the huge corn crop in the United States that was about to reach 9 billion bushels. I asked the group will I be standing in front of you in a few years and we’ll have a corn crop of 14 billion? Clearly, from my perspective that was going to come true and of course this year we have the USDA predicting the US corn crop of over 15 billion bushels.
 
    Keep in mind it will be more and more and more and more. On June 30th USDA estimated US corn to planted on 95.2 million acres and soybeans on 83.4 million acres.  The report in short was a nothing burger, hardly any change from before.  The race for cheap grain certainly isn’t for the faint hearted.
 
        As we head into next week, the long days will get a little shorter, but the clarity we’re all searching for—whether from the USDA, the markets, or the weather—might not arrive so easily. The crops will grow, the heat dome of death may come, and the market will care, or it won’t. What we do know is that geopolitical risk still hangs in the air, even if it’s not moving grain markets the way it used to. At the same time, massive government spending shifts and record-breaking U.S. crop projections are reshaping the chessboard underneath us. That doesn’t mean the game is over—just that it’s getting harder to play. So, we keep moving, keep planting, keep watching, knowing that somewhere in this uncertain jumble is the next opportunity.