Farmers watch markets rally as crops wither

Weather and market analyst Bruce Burnett took a 
first-hand look at crops across the West

If Glacier FarmMedia weather and market analyst Bruce Burnett had to pick one word to sum up the state of the Prairie crop this summer, it would be “variable.”

Burnett logged a 4,500-km crop tour across the Prairies in mid-July and reported in at the third annual Ag in Motion farm show about what he found.

The situation in southern Saskatchewan through to Alberta is looking grim, with some fields already approaching the crop insurance writeoff phase, he told farmers who gathered in the MarketsFarm tent for his daily briefing.

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“Canola looks pretty bad. Durum is hanging in there, but not to the yield potential of last year,” Burnett said. But conditions are deteriorating with each day of dry skies and hot temperatures.

“Last year we saw a high rate of abandonment; this year we are probably going to see about the same level of abandonment.”

Central and northern Alberta crops are looking better, although they too need moisture. “We’re living off last year’s moisture, so crops are being impacted by that,” he said.

Burnett said the variability he saw in fields also applies to crop staging, with some fields clearly late, and suffering a hangover from last year’s prolonged harvest due to wet, snowy conditions.

He even saw combines still at work pulling off the crop that was planted in the spring of 2016.

Manitoba field conditions are by far the best on average. Farmers in this province were able to get their crops seeded in a more timely fashion and they were able to take advantage of the subsoil moisture.

Overall, Burnett said Western Canada is looking at average to below-average yields, which is already creating some tension in the canola markets due to low carry-out stocks.

Canola has risen 7.5 per cent since June. “But essentially the size of the crop is going to dictate how high prices are going to go,” he said.

The big grains story is the Minneapolis spring wheat contract that has climbed 37 per cent since April as a drought wipes out crops in much of the U.S. spring wheat area.

“They’ve just been drier and hotter than we have,” he said.

Burnett said while he expects spring wheat prices to remain firm well into the first quarter of 2018, he doesn’t expect a repeat of 2007-08 when prices rose to $25 per bushel. Carry-out stocks are low, but not as low as they were back then.

The U.S. spring wheat carry-out this year is around 960 million bushels. In 2008, it was a third of that. Last week, the Minneapolis spring wheat price was US$1.41 over the hard red winter price. But he warned any crop that does come off in the droughty regions, will be high protein. So there is limited upside potential of protein.

Burnett said farmers should also be keeping an eye on the Canadian dollar, which has appreciated against the U.S. dollar by about nine per cent since early May. Last week it was trading at $79.50.

“Normally, that’s a negative thing for farmers in Western Canada,” he said.

The low dollar has helped cushion Canadian farmers from the downturn in global grain prices. Its gain in value has already started to affect basis levels.

Deteriorating crop conditions didn’t stop farmers from coming out to see the latest in agricultural innovation. The three-day farm show attracted more than 26,000 visitors.

About the author

Vice-President of Content

Laura Rance

Laura Rance is vice-president of content for Glacier FarmMedia. She can be reached at [email protected]

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