Market Outlook 2006

[charliep]

Next week in Grain World in Winnipeg. I thought I might put in my two bits ahead of this outlook and see if others have thoughts.

Most optimistic crop outlook to date - Wheat. Everyone is following US hard red winter wheat regions to determine winter kill. A less than idea winter across Europe as well. Things that temper this optimism. Stagnant world wheat trade. Higher Northern hemisphere spring wheat acreage followed by increased acres Australia and Argentina.

Biggest wild cards - Feed grains, oats, peas. All these crops have built a strong north american demand base. 80 to 90 % of barley and corn produced is used domestically so any weather problem will send prices higher.

Crops with the biggest barrier to higher prices. Oilseeds. Too many world soybeans. Continued large acres in the US. Bio diesel production is a plus for canola but will take time.

Outside factors that need to be watched.

Trend to a higher valued loonie (at least relative to the US dollar).

Bird flu - Is this the beginning of something bigger?

[lakenheath]

Many growers in our area are planning on increased wheat acres. We are traditionally a huge durum growing area in southwest Saskatchewan.

Larger, highly leveraged farms are going to farm scared this year. Durum acres are dropping fast, but not nearly as fast as lentil acres.

That being said, could there be potential opportunity for a smaller famer to come up the middle and risk growing a little more durum and lentils?

I guess its is still ulimately a world market and we can't base our decisions on seeding intentions on the Canadian Praires alone. It is thinking time, though and not very easy to decide what to grow.