Wild weather situation in Saskatchewan
The narrative all spring and into the early part of the growing season had been about the U.S. Too much rain for too long was the story, leading to late planting, re-planting, and abandonment. The U.S. Department of Agriculture still is unable to deliver planting data as the June survey of farmers did not have actual planting reflected in all areas.
Overshadowed by all of that noise was the weather situation in Canada. For those living it on the farm, it was front and center. But for many in the U.S., or those simply following the markets, the dryness that started the growing season in Canada was largely unnoticed. Crop development was delayed as a result. But good rains and warm weather in the start of July provided relief to many crops, and development is approaching normal in Saskatchewan. According to Saskatchewan Agriculture, 63% of the spring cereals crops are now at normal development stages. But weather made headlines with localized wind, hail, storm, and flood damage. Crops that are behind in development were especially vulnerable to these weather extremes.
Wheat prices worked lower this week. News of lower global production was supportive last week. Following the report however, the market was able to digest the fact that the world is still well supplied and export competition will be strong in the 2019-20 crop year. The U.S. winter wheat harvest is 57% complete. Spring wheat crop conditions dropped modestly to 76% good or excellent compared to 78% a week ago.
The durum market has been flat for the last several weeks. Prices are just not able to find traction, even with lower planted area in the U.S. The North Dakota crop is in very good shape, with 77% rated good or excellent. 75% of the crop is headed, which is ahead of the five-year average pace (though behind last year's 88% mark).
The canola market remains choppy. Development in parts of Saskatchewan is delayed (while other parts of Canada look good). Look for price direction to come from U.S. markets, as well as the outlook for trade relations with China.
The U.S. barley crop showed an improvement in ratings this week. The U.S. Department of Agriculture showed 76% of the crop rated good or excellent compared to 73% in the previous report. Development is a bit behind, however. Just 75% of the crop is headed compared to 89% for the five-year average pace.
Mustard seed markets have been quiet. Prices are little changed with light trading activity over the last few weeks. Crop development had been lagging the normal pace. However, growing conditions earlier in the month were favorable, with warm and wet weather for much of the Prairies. Crops benefitted from that weather and are catching up to normal development.
Pulses are developing well in Saskatchewan. 73% of pulse crops are now at the normal stage of development. But some weather issues are causing some disease as a result of root rot. Despite these supportive factors, greater export competition is keeping prices in check for pulses.