What if Canada Doesn't Produce a Bumper Crop?

[charliep]

Today is an interesting test of things on corn. Pretty bullish S&D on US corn but not much market reaction. Suspect this S&D is built into the $6.50/bu corn already. Then you can get into the what ifs - what if yield isn't the forecast 154/bu acre? What if is 160/acre (happened in 2004 - corn has the yield potential)? From there, what does a manager do with this information?

Just curious as to how much knowledge farmers have about Canada's fit into the world (back to the thread question)? If Canada had a barley crop failure, would the world notice? Likely important to malt barley but would mean squat in terms of world feedgrain production/trade. Will impact the domestic market but can the livestock industry handle the increased costs/long term what will a 25 to 50 % decline in livestock numbers mean to consumption? A wheat crop failure (quantity or quality)? Canada is about 4 % of world production and about 15 % of trade.

[SASKFARMER3]

Melvill honest to god you just dont get the jist of this thread.
I was asking what if Canada doesnt have a crop what will happen, I dont need a speach on marketing etc.
Maybe you should look at the big picture last fall all the experts said that the USA and Canada had a big oilseed crop. And that Canada and US were going to have a decent wheat crop, FROST MENT nothing or Drought. Then by Feb the Shi- hits the fan and ever one realizes were out of grain. Boy Some of us knew that back in fall and waited till Feb to sell most of our crop, And we were rewarded big time, Income tax loves us thats how big we were rewarded. So dont give me the crap. Again i am saying what if Canada doesnt produce a crop or Australia Like the experts are predicting before we grow a crop.

[charliep]

To go to the other side, how much risk premium is built into current market prices? Yesterdays USDA highlighted in spades the need have a good crop around the world. I don't think any market analyst doesn't realize.

In the case of winter wheat, Northern hemisphere harvest is close to underway and for the most part okay. Winter wheat deliveries in most regions (including the US) are large off the combine (cash flow) and this often pushes prices lower through the summer. We'll get into discussion of spring crops in July (including our wheat) and southern hemisphere crops during the later summer/fall. Increasing consumption levels (and perhaps a shift in the demand curve because of bio fuel) are what brought us here and will be the factor this fall (assuming good crops).