By Scott Shiels
Scott Shiels grew up in Killarney, Man., and has been in the grain industry for 30 years. He has worked with Grain Millers Canada for 10 years and manages procurement for both conventional and organic oats for their Canadian operation. Scott is an elected board member for Farm and Food Care Saskatchewan and sits on several other committees on both the organic and conventional sides of the oat industry. Scott and his wife Jenn live on an acreage near Yorkton, Sask. Find out more at www.grainmillers.com.
What an interesting year it has been so far in the grain marketing world! From extremely short rail strikes and Chinese tariffs on canola at harvest to a crop that was subpar quality-wise, we have had—and will continue to have—a very challenging year in the markets.
As we rolled into harvest, quality of the crop became quite the concern on the Prairies as a hot and dry July took some bushels, but more importantly, it took test weight out of a lot of crops that just needed a rain to finish filling. Once again, we bore witness to the fact that it’s not always about the amount of rain we get; it’s the timing that’s most critical to our crops. As we pushed through the first quarter of harvest and neared the middle, quality began to improve, giving producers and buyers some confidence that all was not lost.
Futures markets were under pressure throughout August and September, with very little bullish information coming from anywhere in North America. Corn, wheat, and soybean production forecasts from south of the border continue to put a bearish spin on things, so we will have to see what actually comes off after harvest is complete.
On our side of the border, throughout much of the harvest season, markets remained soft as the trade based a lot of what they were doing on the potential this crop had earlier in the summer. The reality of the damage done by the heat in July really was not apparent until the combines rolled, and, by then, most commodities had lost a considerable percentage of the cash prices. By mid-September, most of the bids locally had started to recover some of the losses, but we still have a long road ahead to get back to the numbers that were available just six months ago on this crop.
One thing this late fall rally should do is help with new crop pricing for the coming year. With a smaller crop in the bin, causing tighter supplies across the board, prices will need to be aggressive, and compete, to drive acres into the ground to replenish supplies in the new year. I believe the most competition will be in the cereal acres, with wheat, barley, and oats all looking to increase acreage for the coming year, and I believe there is a good chance some of these acres will come at the expense of canola acreage on the Prairies. With the big carryout and large acreage this year, even a smaller canola yield average is going to leave that market with an overabundance of product to crush. If the Chinese remove their tariff on Canadian canola, it could help the market considerably, but if it remains in place, we could see a significant reduction in canola acreage in 2025. With the cost of production on canola not coming down any time soon, today’s prices don’t pencil out very well on the bottom line. Hopefully, all of these factors straighten themselves out over the coming months, but I’m not holding my breath.
Until next time…