It has been a busy harvest week here in southwestern Ontario. Yes, your loyal scribe was able to get his combine in the fields joining the soybean party.  The weather’s been unbelievably beautiful very hot and dry good for harvesting soybeans and planting wheat.  I heard from my friend and DTN subscriber Howard today. He told me some of his land in Illinois got 81 bushel per acre soybeans.
 
     That’s good for Howard and it makes me feel a little bit small, but I will try harder next year. I think that there probably is a bit of a comparative advantage to some of his Illinois land versus my soil here in southwestern Ontario.  Needless to say soybean yields are down this year province wide simply because of the drought which impacted much of central and eastern Ontario.  Who knows, maybe one of these years it’ll be Howard’s turn on his land in Illinois.
 
It’s pretty clear we’ve got some pretty good soybean yields in the United States, but the market is being fickle. Sure, we had double digit gains in soybeans today, but the market is still down compared to what it was a couple weeks ago. The big problem you hear constantly out of American farm country is the lack of Chinese demand for soybeans. Apparently, there is a meeting being planned between President Trump and President Xi on Halloween.  However, you would think the Chinese would almost have all their needs met by then.  Meanwhile I hear soybeans are being piled up in the Dakotas.  You’ve got to put the beans somewhere and this year that certainly isn’t China via the Pacific Northwest.  Last year at this time the Americans had sold the Chinese about 625 million bushels.
 
On the contrary the Chinese are actively buying Ontario soybeans. Now keep in mind this is not a big reason to get excited on price in Ontario. There might be some of us who feel they won’t buy from the Americans, but they’ll buy Ontario soybeans. That might give us a good feeling for a while but there really isn’t much to it.  Probably the only people who are getting excited about it are basis traders in Ontario and Quebec.
 
I say that because traditional markets like Indonesia and other countries in Southeast Asia as well as other buyers can see what a bargain is, and they know what a commodity is. Right now, American soybeans are some of the cheapest in the world and with the Chinese not taking them they’re going into markets I described above.  That muffles the impact of Chinese buying of Canadian soybeans.  Also keep in mind that all the soybeans we produce in Canada might keep the Chinese going for maybe 10 days. The major players for soybeans in China now reside in South America almost exclusively.
 
While this is been going on we also had the USDA come out last week with their stocks report. This report on September 30th of each year often reshuffles the deck.  This year the USDA raised corn stocks to 1.53 billion bushels as of September 1st which was above pre report expectations.  At the same time, they lowered soybean stocks to 316 million bushels, but this was within trade expectations.  They also changed the USDA numbers from 2024. The result was 25 million more bushels of corn production and soybean production was increased by 7.74 million bushels. Keep in mind, it just goes to show you that the USDA continues to change numbers long past when the crop was grown.  Let’s just say at the end of the day, big supply was winning then and to a greater extent it seems to be winning now.  Having said that, our prices are still higher than a year ago.
 
What’s next for Canadian farmers in this environment?  Well, the loonie hit a four-month low today of 71.63 US.  As always, the lower loonie is a stimulus to our cash grain prices.  Keeping things in perspective we do have a few problems even though we’re trying to look at things with an optimistic lens. There is a federal budget coming in the first week of November and tax increases are likely especially if we were going to spend even more on our national defence.  We also have an no new trade deal with the United States.  All of this is a bit troubling.  Surely the currency traders who buy and sell the Canadian dollar are thinking the same thing. 
     At the end of the day, the numbers, the reports, and the currency swings are all part of the game. What matters most is what we see out the end of the combine and the bids at our local elevators and processors Some fields will surprise us, some won’t, and the market will do what it will. Our job as Canadian farmers is to keep harvesting and marketing with discipline and perspective. Sometimes this risk management game is long.  Here we are.