YORKTON - When you have been writing a column on agriculture for some three decades you tend to think you’ve seen it all.
But recently there have been reports of some marketing opportunities for canola in the range of $24 to $26 per bushel – a dollar figure that truly seems astronomical, especially since this writer recalls a time $10 a bushel was thought of a ceiling that prices tended to bump up against and then tumble lower.
Of course that $10 bill has a more significant purchasing power back in ‘the day’ as they say, than it does now.
One would only need to look at the price of the largest four-wheel drive tractors, or on a tonne of nitrogen fertilizer to understand the huge price today doesn’t necessarily give producers the ability to buy more than when prices first flirted with $10 per bushel prices – for example in 2008.
It is however interesting some analysts think prices might still have the chance to inch higher. That might not be so hard to understand given questions regarding moisture conditions headed to seeding, and of course the war in Ukraine.
In terms of moisture, locally in the Yorkton area the snowfall would also suggest a good start to replenishing soil moisture but some experience shoveling over the past months suggests a lot of the snow this winter was fluffy, indicating it piled into significant drifts, but wasn’t likely to melt into a great deal of moisture.
The situation is likely to be variable, and that uncertainty has to make canola markets nervous. There is a huge infrastructure in place now dedicated to crushing canola, and the plants need to operate, and that demand while having limits, appears willing to pay significant dollars to access canola supplies.
The impact of the war in Ukraine is likely to hold most farm products from dropping greatly in 2022. War typically strengthens commodity prices, and the very real possibility that NATO will eventually muster up the gumption to support Ukraine in the face of the bully of Vladimir Putin has to have markets even more nervous than it would be if Ukraine was seen as an isolated conflict.
Another issue in the mix, there always seems a variety of factors farmers must balance in making cropping decisions, is the impact of potential rail disruptions at CP.
Canola markets tend to be local for seed deliveries, but would disruptions impact the ability of crushers to access their markets?
It all makes for a volatile situation in terms of canola prices and production, but ultimately there will likely to be a lot of acres devoted to canola this spring given the prices today and potential moving forward.
