What if Canada Doesn't Produce a Bumper Crop?

[SASKFARMER3]

As I am seeding its seems funny how since the famous Feb 25 Crash in grain prices all I have heard is how all over the world we are going to produce a bumper crop and stocks will be rebuilt not to high levels but just enough to keep all happy.
But wait were just seeding in Canada the USA, Europe etc. Seeding isn't going great in USA and well in Canada one week is done in May and guess what the warmest day of the year so far was second week in April. No trees have leaves, ground is really cold. But wait all early canola that's coming out of the ground gets froze off ever second night. And Friday the high will be 3 Celsius. But wait were on our way to a huge crop.
Is it just me or does this seem a lot like the weather pattern we had back in 02 and 04.
Were socking every thing at this crop in hopes of chasing the high prices that were available back in Feb.
But what the heck will happen if it Freezes in early August again in Western Canada. Cutting yields etc.
I know it sounds like doom and gloom, glass is half empty etc. but what if it happens.

[Hopperbin]

Yes I cannot believe there are no leaves on the trees yet but I can understand when I try to scratch for planted seeds. That ground is cold. At least were going straight through everything so far this year. And it is already minus 2 at 10;45pm

[SASKFARMER3]

Most low areas are dry enough to get through but found two that weren't and stuck for a few hours till the other tractor got their. Ground is really cold and tomorrow is even colder.

[SASKFARMER3]

The other thing I hear over and over is how big the Australian crop will be, What the H E double hockey sticks is going on. Their just starting to plant their winter crop. What a Crock of Crap."Wheat sold off yesterday on ideas global production will exceed demand this year, starting a long-term process of rebuilding stocks. A key component of that would be Australia. While little rain is expected over the next week there, one forecaster sees better chances after that, just as farmers get serious about planting."

[grassfarmer]

The bumper crop is getting off to a bad start in my neck of the woods. Nobody has turned a wheel on grainland yet. 1/2 inch rain on Tuesday, another 1/2 overnight and this AM already, the ground is currently white from sleety snow. Attempted to fence a sloughy area yesterday and the frost was still in the ground - solid at 4 inches down. Still cold, cold, cold.
Looking better moisture wise for my grass but sure not looking good for a bumper grain crop.

[melvill]

SF3, you asked, "what the H E double hockey sticks is going on?" Incidently, have you been listening to my eleven-year-old? He uses that expression.

Most of us learned in high school economics that prices in a market economy are arrived at based on supply & demand. It's probably more correct to realize that market prices are arrived at based on what everyone's - the market place's - perception of what available supply and expected consumption is. Of course, eveyone's perception of available supply and likely consumption changes every day.

Of course, perception actually means what the market place believes. At this moment, a good chunk of the marketplace believes that the Aussy crop will be big. Tomorrow that may change.

Remember that perception - what people believe - can be reality in their minds. Millions of perceptions make the marketplace.

Another example of perception: I have met more than one person, as recently as 15 years ago, who didn't believe that U.S. astronauts landed on the moon!

[Wheatking]

Full moon on Aug 16th has me worried, seems eerily similar to 2004. This cold weather doesn't have me too anxious about seeding, but the date does.

[Southpaw]

Well, I would doubt a bumper crop. I'm in Western Man. and we are in the process of ripping up 700 ac. of winter wheat that didn't make it and is now brown and crunchy.

[SASKFARMER3]

Melvill no kidding thats how basic economics work, What I am trying to do is get a discussion going on what happens if we dont produce a bumper crop. Is Australia that important now that their is no AWB, Its just discussion.
Finished the peas tonight, Durum done by other drill, did some HRS to, will switch to Canola on Big drill and Ill be buisy rollin peas.

[Hopperbin]

Wow sask. talk like that sounds like your half done. I have been planting peas for 3 days and will for another 2.
Don't like the looks of the post harvest glyphosate job noticing some winter anuals surviving now. And with all the scrathing and checking for seed runs working I found 1 healthy canola seedling.

[SASKFARMER3]

No were at 17 done after week. But now the smaller drill is done for this week as we spray and roll stone pick etc the fields that are done. Was to cold till now to do a job on the glyphos, waste of money. Saw some poor performance form last falls glyphos to but could be because we were so wet that it didnt get a good kill. Were 1/3 done. Funny today the snow geese are just starting to head north.

[melvill]

Well, SF3, as you know, the world doesn't have much of a cushion to fall back on for most crops if there is a production wreck somewhere. The bigger question is, 'when will perception tell the marketplace that there is a crop problem somewhere?'

Those of us in the farming biz are naturally bullish so we look pretty hard to find crop condition info that supports our bullish inclinations. Sometimes we look too hard and our bullishness isn't rewarded. The end result is that we don't make marketing decisions until later when prices have slid.

[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).