By Connor Lynch
TORONTO — The Canadian dollar will be the thing to watch as this year’s crop comes off the fields.
Other than currency movements, it’s been a “boring year,” when it comes to pricing corn and soybeans, said Parrish & Heimbecker grain merchant Steve Kell. He told Farmers Forum that “with the exception of a bit of a rally in the dying days of June, which was based on dry conditions in the U.S., prices have been extremely flat all year.”
But a sliding American dollar and a rising Canadian one is something for farmers to watch. “It would be nice if the (CDN) dollar would go back down but I wouldn’t bet the farm on it.”
Kell said this year will follow the same general trends as others. That means that the best time to start marketing 2018 crop will be during the winter. “Prices are always higher when we’re farthest out from the delivery period,” as the market pays for mitigating risk, with buyers giving farmers a premium to guarantee crop for themselves, Kell said.
Dresden agronomist and crop farmer Phil Shaw told Farmers Forum that watching the basis is going to be critical for soybean marketing. Beans are notoriously resilient to bad weather and bad market conditions as well, said Shaw, as their futures have held up despite record acreage in the U.S. But beans are highly sensitive to the exchange rate, much more so than corn, Shaw said. A rising Canadian dollar means a drop in the cash basis for beans.
Keep an eye on the markets daily, he cautioned, and watch what Brazil does. They’ll be planting soybeans in October. “If they have trouble, that will mean movement in futures,” he said.
