Recommendations during summers are communicated via Group Texts but back to normal reporting schedule before too long. This is an update on Old and New crop sales positions, and one of the last 2013-14 (Old Crop) reports.
After an interesting year and a big crop, we captured 61% and 63% of the Canola and Durum Moves respectively.
You will find sale by sale data in the full report. There will be a give back on some Move Capture points once Carry Costs are taken into account in the next Marketing Plan report, but not as much as one would think, given we were 47% and 72% sold off the combine on each crop and the lows for the year also had deep carry costs. After sitting in Jan-Mar at sub-40% Liquidation values and watching other analysts sell into that, we consider hitting our target a successful year. Lentils are now at 49% Move Capture on a liquidation basis as we are only 40% sold, but we believe strongly in a massive price increases ahead.
Seeing East-half Sask, West Manitoba first hand, a week prior to the finishing rain, and a couple of trips up the gut of Saskatchewan along #2, we halted initiation of any further sale as those crops were in tough with even 1 more June inch of rain – not the 7 inches they got.
Weber posted these two AgCanada NDVI maps tonight and they more than confirm our concerns. With the dry acres in N.Alberta, Weber highlighted 20 million acres potentially influenced by bad weather and our 8 million too-wet acre estimate doesn’t look so crazy now. The 1 million consensus is ludicrous and optimistic. A normal frost year and all 20 million acres will be in trouble.
The Canola belt is in greatest jeopardy, and while Beans are tanking on massive US and Canadian acre increases and big US yield potential, they should level around $10 or better we believe and we feel Canola premiums to Beans once again making sub-$10 a low Canola price with our dollar below par.
The southeast corner of Durum country is in trouble right into the US. There will be a good bid and value in moving product out of our immediate area where local buyers profited enough last year for two years so we shouldn’t feel too bad moving our grain right by their driveways so they had better try to compete this year. A couple local elevators also failed their customers on the logistic front and in winter contracting and should not be forgiven for buying so badly last fall.
Green Lentils will be influenced by wet weather to only a small degree but with StatsCan printing a flat Green number last week, the market is finally realizing that Green acres are not higher at all as it thought before. Before long a print will show that they are in fact down – possibly significantly so , and with normalized yields and a tight carry, we are going to see 30c for a #2 as a low price. We are recommending holding the remainder of our unsold position into the new year if need be.
Flax definitely in the heart of drowned areas and the crop in general can not afford to be late. The market has gotten a late frost every year for 5 so will probably not price in enough premium until the crop runs out of time which we feel it will.
Peas will mostly be a focus on India and late Monsoon rains. We will continue to watch.