Cdn Grain Demand Picking Up

[errolanderson]

Demand for Cdn grain appears picking up. Consumer hoarding of flour, bread ad pasta and food distribution problems have supported cash markets of-late (IMO). Milling wheat, durum and CPS appear moving with bids firming. Russia may be restricting exports. There is pressure on Putin to maintain domestic wheat supplies, but there is a push for foreign currency as well.

Feedlot barley bids are climbing in southern Alberta. China is now a buyer of western Cdn feed barley once again. Canola is in a gradual recovery. Attractive delivered basis levels have been seen. India has been a more aggressive buyer of pulses lately. Lentil and yellow pea demand appears picking up.

Cattle processors are scrambling for market-ready cattle with huge kill margins. But kill chain has slowed due to workers not coming into work dependably at times. Coronavirus has created inefficiencies, which can create an inflationary push on food prices.

Corn is the weak link . . . tied to energy markets. 30 U.S. ethanol plants have been recently shutdown as processing margins deteriorate. USDA acreage report was bearish for corn and supportive for soybeans. But we have to still get the crop in the field with inputs in-place . . . these will encounter inefficiencies.

The stock market remains a basket case with fresh lows possible (IMO). Credit markets are in very bad shape. The biggest risk may be the U.S. corona cases spiralling well above anyone's expectations and well above any country in the world. The next two weeks may tell this tale.

If panicked consumers race to Costco to stock-up for years worth of toilet paper for some unknown reason, even the long-term bearish grain market can definitely take-a-turn for the better.
An opinion . . . .

[mcfarms]

you better tell the markets that today.

[Partners]

There is a shortage but will not pay for it.
Our may contract wht is going Friday.
Someone other than the farmer will make the mega bucks.

[agstar77]

It is not yet clear which way this will go. Keeping the economy afloat will help. Consumers need to feel confident when they go out to buy food. During the depression deflation was rampant and uncontrollable. We can't go there. The government is right in pulling out all the stops.

[Austrian Economics]

It is not yet clear which way this will go. Keeping the economy afloat will help. Consumers need to feel confident when they go out to buy food. During the depression deflation was rampant and uncontrollable. We can't go there. The government is right in pulling out all the stops.

Deflation is already rampant. We are there already. Pulling out all the stops essentially means removing all the roadblocks to outright bankruptcy. Most provincial governments are in this state right now. If we keep going on this path, eventually even the Bank of Canada will be insolvent and the currency will be worthless.

[Guest]

It is not yet clear which way this will go. Keeping the economy afloat will help. Consumers need to feel confident when they go out to buy food. During the depression deflation was rampant and uncontrollable. We can't go there. The government is right in pulling out all the stops.

Well , the carbon tax increase will sure help , hard to believe the LPC is that simple and that the CPC is letting them do it?

[agstar77]

The carbon tax is D.O.A. The purpose was to reduce carbon use, well guess what, it's happening without the Tax.

[furrowtickler]

The carbon tax is D.O.A. The purpose was to reduce carbon use, well guess what, it's happening without the Tax.

Then why not can it , let alone increase it ??

[Guest]

Then why not can it , let alone increase it ??

Because its a tax grab , plain and simple

[Rareearth]

All the bankrupt oil sector companies could receive huge carbon tax credits/ rebates based on reduction of green house gases compared to last year? Keep one guy in the office to open the mail?

[furrowtickler]

Because its a tax grab , plain and simple

Exactly..... was / is a desperate for wealth distribution.

[errolanderson]

The key to all markets . . . equity and commodity is 'sign of stability' in the global oil market. Oil is now basically the global currency of the world. Trump's tweet of a 10 to 15 million barrel Saudi / Russia daily production cut yesterday appears quite exaggerated. It popped crude prices 35% higher briefly. Oil industry analysts suggest a 3.5 million cut may be possible and closer to the truth . . . but this is a start.

Should oil stabilize, this will go a long ways to allow all other commodities to stabilize. And grain has been the firmest of them all recently.

Wheat to us, remains oversold. But it is all about the Black Sea region. The U.S. doesn't have much say in this market. Russia will placed some form of export curbs in-place. India's harvest is off to a rocky start due to COVID. India produces nearly 15% of the total global wheat production. Argentina's soy harvest has been downgraded.

Bottomline . . . how can a global pandemic not cut grain production? There will be many input / harvest inefficiencies and labor shortages . . . now stir in potential weather issues.

Stock markets are a different bird (IMO). Investors have been babysat with grossly inflated valuations for so many years that there is a lot more pain possible ahead. Reality sucks in this side of the market ledger and it will likely change the next generations appetite for debt (IMO).

More equity trouble ahead, but stability and cash market gains possible in the grain world ahead.

[the big wheel]

Which countries may ag production be affected by covid if any is the question? May be some good opportunities.

[errolanderson]

Which countries may ag production be affected by covid if any is the question? May be some good opportunities.

They all will . . . .

[furrowtickler]

Which countries may ag production be affected by covid if any is the question? May be some good opportunities.

India .... hence the run up recently in red lentils
The farm work force is concentrated in groups ... or was .
Agree with Errol , they all will .