Weather Forecast



Spring wheat production was outstanding in the Campbell, Minn., area this year, with yields at 70 bushels per acre and protein content at 14 percent-plus. Photo taken at Campbell, near Doran, Minn., on Sept. 6, 2017. (Forum News Service/Agweek/Mikkel Pates)

Hurricane impact on markets

Hurricane Harvey has just passed and the devastation for countless families cannot be ignored. And Hurricane Irma is to make landfall in the southeast U.S. after already wrecking many parts of the Caribbean. At a human level, this is clearly a trying time for many. But many readers of this publication are not physically very close to where these storms have or will hit, and the impact is not easy to see from a market perspective.

The first and most noticeable thing is fuel costs. A lot of production and refining of fuels are done in and around the Gulf of Mexico. Prices at the pump are rising across the country. Another impact is shipping. Though most of the products from the Northern Plains and Canada are not going out of the Gulf, exports from that area are on pause with the storm, and any damage to ports could take some time to fix.


There has not been much excitement for wheat prices this week. Overall supplies are very good and the biggest mover is the record Russian crop hitting the world market. Competition for exports will be strong as Europe, Russia, the U.S. and Canada are all looking to sell. Spring wheat harvest in the U.S. is at 89 percent complete compared to 78 percent for the five-year average but right in line with last year's 90 percent. The weather has allowed for quick harvest work, and with mostly dry conditions expected for the next couple of days, this trend should continue. Further out, some rain may delay final harvesting efforts.


The price of durum has dropped modestly from a week ago. Major additional downside is not expected given the poor crop, though. Harvest work is nearly done in North Dakota. The U.S. Department of Agriculture reported 74 percent completion compared to 67 percent a year ago. The remaining crop is not in great shape, with just 18 percent rated good to excellent.


Canola markets have stayed relatively steady with a lot of information to process. Harvest activity is showing yields coming in all over the place. This makes it difficult to predict if total output will be close to the government forecast of 18.2 million metric tons.

Statistics Canada also released stocks of canola at the end of July. Just 1.35 million metric tons are on hand, which is 36 percent below a year ago. While this is very tight, the market was expecting a number around this level, so the price reaction was not extreme.

Now the big question comes back to production expectations for 2017. If 18.2 million metric tons is the production number, rationing will be needed as demand has stayed strong. The U.S. brought in 362 million gallons of canola oil in July, bringing total imports for the year to 12 percent above a year ago. Given the push for biodiesel production to be done domestically with new U.S. government rulings, major price support will be needed to cool that demand in the months ahead.

Peas & Lentils

Expectations for lower output of pulses has resulted in firmer prices. Statistics Canada released estimates based on farmer surveys and found that output could fall to 2.29 million metric tons from 3.25 million metric tons in 2016. This is a 29 percent decline and more than the market was expecting.


According to Statistics Canada's survey of growers, mustard seed output is expected to be sharply lower in 2017 from a year ago. Yield is thought to be 898 pounds per acre in Alberta and 646 pounds per acre in Saskatchewan. This would bring total output to 129,500 metric tons from 235,600 metric tons in 2016.


The U.S. barley harvest is nearly done at 92 percent completion. This is ahead of the five-year average pace of 84 percent completion.