What on earth is happening right now with canola and spring wheat prices?
Call it a 2021 hangover or the cruelest of come-downs, but many farmers are watching crop prices with just a pinch of melancholy as the bears seem to be making themselves at home again in the canola and spring wheat markets.
To unpack this pic-a-nic basket of bad news (see what we did there?), Shaun Haney is joined by Brian Voth of IntelliFARM Inc.
Looking at ’21 prices, those sky-high values did what they needed to, which was rationing demand because there just wasn’t enough out there to go around.
The trouble is, Voth notes, is that demand goes elsewhere and it doesn’t always come back — or at least, not at the same price it may have before. That’s where he says that in the longer-term he views a continued slide to the downside, not that that’s what farmers want to hear.
2023/24 crop volumes will be better than ’21, that’s for sure, but some of that weather market that bumped prices a few weeks ago has likely already worked itself in to prices.
For canola, there are other options for many traditional buyers of Canadian product, and right now, their prices are more competitive than ours, Voth says.
Spring wheat is a slightly different story, as, yes, demand is still a big unknown, but Black Sea strife and logistic issues are the larger unknown there. Plus, he notes, if Russia does continue to push out more wheat at a discount, that will weigh on global prices and supply.
There are tools farmers can use to manage downside risk, Voth says, and years like this are great examples of when options really play a role in a marketing strategy.