Harvest moving

WINNIPEG, Manitoba -- Finally, now that we're into September, there's some serious combing being done. Most crops are ripe but few are dry. Quality is an issue, with mildew the biggest concern.

WINNIPEG, Manitoba -- Finally, now that we're into September, there's some serious combing being done. Most crops are ripe but few are dry. Quality is an issue, with mildew the biggest concern.

There's not much No. 1 Canadian Western wheat. Fusarium does not appear to be a big issue.

IGC cuts global durum production

The International Grains Council has cut the size of the global 2014 durum crop to 33.7 million metric tons on smaller crops in Algeria and Turkey.

This is the lowest production since 2001. The 2014 to '15 carryover will be 5 million metric tons, the lowest since 1999. Bottom line: No. 1 and 2 durum will be hot markets this winter.


Russian sanctions and wheat

The U.K. plans to propose blocking Russia from SWIFT banking transactions, which would cut off Russian businesses from the rest of the world.

This could have a major influence on wheat and all commodities of Russian origin because this is the network for major financial transactions.

The situation in Ukraine is deteriorating, and the wheat market has been factoring in larger-than-expected production from the Ukraine and Russia. But if these sanctions go through, the wheat market could face a sharp rally. Sometimes, just the fact that these sanctions are on the table could cause wheat markets to incorporate a risk premium and cause buyers of Russian wheat to look at other origins. This is a major factor to watch in the next couple weeks.

Adverse rains continue to plague the Southern Canadian prairies and a larger part of North Dakota. Cooler temperatures have delayed the maturing process and harvest progress in Western Canada. Basis levels are improving in an effort to get the farmer to deliver old-crop stocks.

The wheat market has potential for a seasonal rally in late September and early October, once the harvest pressure has subsided in the Northern Hemisphere. The potential for lower Russian wheat exports could enhance this rally. Stay close to our recommendations because we will want to sell into this market strength.

Canola trends lower

The long-term downward trend in canola remains intact. Farmers selling of old-crop supplies and the anticipation of harvest pressure continue to weigh on the market. Softer cereal grain prices will cause farmers to sell more canola for cash flow. Spillover pressure from the bean complex is becoming more evident now that the crop is closer to harvest.


U.S. soy oil supplies are expected to swell, pressuring domestic canola crush margins. Palm oil values are also trading near five-year lows, and lower Chinese demand for vegetable oils is setting a negative tone on the world market.

Later in winter, expect canola to divorce from the major oilseed complex because the canola fundamental structure for the 2014 to '15 crop year is significantly tighter than in 2013 to '14. Next spring, the canola market needs to encourage acreage through higher prices.

Weaker corn pressures barley

Lethbridge, Alberta, feedlots are buying barley around $170 per metric ton delivered, down $6 from the previous week. Harvest is slowly progressing in Southern Alberta, weighing on the feed grains complex. Second, U.S. corn is starting to flow into Southern Alberta at $176 per metric ton delivered. More feedlots are starting to switch over because corn deliveries are more reliable during low prices and there are higher feeding efficiencies. The delayed wheat harvest is also setting a negative tone. There are limited homes offshore for feed wheat, which will cause supplies to flow into the domestic market if adverse weather continues.

Editor's note: Duvenaud is the publisher of the Wild Oats Grain Market Advisory. For a sample issue, call 1-800-567-5671 in Western Canada and North Dakota, 204-942-1459 for all others, or e-mail or visit

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