Hensall Co-op Members:

We are accepting nominations for Directors of the Board.

At the Annual General Meeting (AGM) to be held on Wednesday November 27, 2019, we will be holding elections for 3 Directors. Aise Van Beets (Bayfield) and Terence VanderWal (Denfield) have completed two 3-year terms and Ed Mosterd (Shakespeare) has completed three 3-year terms. All three of these candidates are eligible for re-election at the AGM.  

Nominations for new Directors must be submitted prior to October 15, 2019.  Under the bylaws of our Co-op, members cannot be nominated from the floor at the meeting.

Should you know of a candidate who you believe will represent the members of Hensall Co-op well as a Director on our Board, we encourage you to nominate him or her using one of the following options:

• by delivering the nomination form in person to the Secretary of the Co-operative, Mr. William Wallace;
• by registered or ordinary mail addressed to the Secretary of the Co-operative, Mr. William Wallace at P.O. Box 219, 1 Davidson Drive, Hensall Ontario N0M 1X0;
• by facsimile transmission addressed to the Secretary of the Co-operative at (519) 262-2450
• by email to bwallace@hdc.on.ca.

You must be a member of the Hensall Co-op to nominate a potential new Director. Again, all nominations must be submitted prior to October 15, 2019. 

Thank you for participating in your farmer-owned co-operative.  We look forward to seeing you at this year’s AGM on Wednesday November 27, 2019.

Sincerely,
HENSALL DISTRICT CO-OPERATIVE, INC.

Peter Dinsmore President		Robert Cornelis Governance Committee

Nomination form

Prices were mixed over the past 2 weeks. Weather remained non-threatening. A warm, wet 2-week forecast will add bushels and help crops reach maturity. There is no risk of frost in any of the main growing areas.

Last Monday’s US corn crop ratings report was a bit of a surprise as 3% fell out of the good or excellent categories to only 55% now. Last year it was 68% at this time. Illinois showed the largest drop, falling 8 point to only 38%.

The US corn crop remains well behind in maturity. Only 55% is dented. Last year it was 84%, while the average for this date is 77%. A large portion of the crop needs a lot more time to finish.

Only 92% of US soybeans are setting pods. That means over 6 million acres are not, or about twice the total acres planted to soybeans in Ontario.  An early frost would obviously be devastating to the soybean crop also.

Ontario corn and soybean fields are also late, with a huge variability in crop conditions even in a small area. Overall yields are unlikely to be as strong as they have been in the past 2 to 3 years. Unfortunately, prices don’t look like they will make up for the smaller crops.

USDA will release their monthly demand/supply report on September 12. Most are looking for a slight reduction in yield compared to their August report. The other important component is acres. Will USDA acknowledge the acres not planted?

Brazil usually starts planting their soybeans by mid September. Conditions there are very dry for this time of year, so very little planting is occurring. However, Brazil has a very wide planting window, so markets aren’t concerned yet.

Wheat prices firmed when Australia predicted their wheat crop would only be 19.2 million mt. USDA has them at 21 mln, which is still well below the 25 mln mt average they have achieved over the past 5 years. This should help North American exports.

Livestock markets remain on the defensive. Cheap grain usually leads to cheaper meat prices, as farmers walk the grain off the farm. Cattle hit a 10-year low in the latest week. Seasonals are usually weak heading into the fall.

Outside markets were mixed. Recessionary fears linger, keeping a lid on interest rates. The low rates and amount of liquidity in the system is keeping stock markets firm, however, as all the savings etc. need to have a home.

Grain prices were mixed over the past week. The yield and acreage debates continue. Weather will be a factor over the next 6 weeks at least as crops remain behind in development.

The Pro Farmer crop tour pegged the US average corn yield at 163.3 bushels per acre. USDA put it at 169.5 in their August 12 report. If the US has 85 million acres, that is a difference of 527 million bushels, a significant difference.

Soybean pod counts were significantly less than last year, and average, especially in the eastern grain belt, where conditions were more difficult. Even in Iowa, where crops look the best, there were fewer pods than usual.

In their latest crop ratings report, conditions did improve over the past week. Good/excellent corn improved 1 percent to 57 percent of the crop. Last year it was 68 percent at this time.

Soybeans improved 2 percent to 55 good/excellent. Last year it was 66 percent in the top two categories. On August 12, USDA put the soybean yield at 48.5 bu/ac versus 51.6 last year.

Most of the US Midwest will see below normal temperatures over the next 2 weeks. This is not what crops need right now. Corn that is denting is only at 27 percent compared to 59 last year and 46 percent on average.

79 percent of US soybeans are setting pods, A year ago it was 94, while the average is 91. The bottom line is that the main growing areas, including Ontario, will need to be frost free for at least the next 6 to 8 weeks.

The next USDA crop report will be released on September 12. Hopefully, it will clear up some of the large discrepancies that traders are trying to reconcile.

Then there’s the demand side. On August 23, China unexpectedly raised the tariffs on many US exports, including agricultural products. Surprisingly, Trump tweeted on the following Monday, that negotiations were on again. A day later China denied that.

Crop futures have given back most of the gains they made on the spring weather. Nearby corn futures topped at $4.64 in June, while soybeans hit $9.21 and wheat got to 5.58. Now we’re at 3.57, 8.46 and 4.74, respectively.

Livestock futures aren’t doing so well either. USDA said they have 11.1 million cattle on feed, the highest since they started that report in 1996. US live cattle futures are not far from their lowest price since 2010.

Nearby hog futures rallied to $.93 per pound in May after the African swine fever story hit. Prices are back to the $.63 area now, despite the huge decrease in pig numbers, especially in Asia.

The low prices in agriculture that exist today will present a major challenge to all farmers that operate in the free markets. The US is helping its farmers with huge subsidies. Even though we have an election in less than 2 months, politicians here seem oblivious to what’s going on.

Corn and wheat were lower while soybeans were higher over the past week. USDA released their monthly demand/supply report on August 12, and once again, there were more bearish surprises in the report.

The biggest shock was in corn. The US yield was put at 169.5 bu/ac, much higher than the 164.9 bu anticipated. That’s actually 3.5 bu higher than USDA predicted last month, despite the trying weather much of the eastern grain belt faced all spring.

They also dropped projected US exports by 100 million bu and corn for ethanol by 25 million. The final carry out (CO) then will be 2.181 billion bu. That is a massive 561 bu more than traders expected. Corn dropped limit on the “news” and another 16 cents today.

Acres were reduced by 1.7 million to 90 million. Most think that number will be reduced in further reports, but there is no guarantee that will happen. The corn crop is still far from maturity, so weather remains very important for the next 2 months.

The soybean yield was left unchanged at 48.5 bu/ac. Planted acres were reduced by 3.3 million to 76.7 million. Production then would drop 165 million from last month’s estimate. Exports were reduced by 100 million bu, however.

This puts the soybean CO at 755 million bu. This is a nice drop from the 1.07 billion bu that USDA says the US will have left over at Sept 1 this year. Unfortunately, that would still be the second largest CO in US history.

The US wheat fundamentals were left basically unchanged, with the CO still above the burdensome 1 billion bu mark. World wheat stocks were dropped a minor 1 million mt, so there is no shortage of wheat in the world either.

The Argentine peso dropped 25 percent in the past week. The new leader is not market-friendly, and higher taxes could be put on ag exports. A lower peso makes Argentine grain cheaper for foreign buyers.

Financial markets have become more volatile, as uncertainty is increasing in many parts of the world. The China/US trade deal is far from being settled. The situation in Hong Kong seems to be worsening. Relations between Iran and the US are deteriorating.

Gold keeps gaining as a result. Bond markets remain firm as interest rates ease. Evidence builds that world economic growth is slowing. The US federal government deficit so far this year is already greater than it was for all of 2018 at $867 billion.

Please be sure to RSVP if you are joining us in Tilbury or at the Muscedere Winery.

Register HERE for Tilbury and HERE for Harrow/Muscedere Winery, or call the locations to book your spot!

Commodities Report

Prices retreated further over the past week. Important support areas were breached, causing heavy speculative selling. Fundamentals took another bad turn, as the trade war between the US and China escalated.

$4.20 on Dec corn and $. 8.90 on Nov. soybeans were violated. Prices immediately fell another 20 cents and 36 cents respectively. At the recent low, corn is 70 cents from its June high, while soybeans have dropped 93 cents.

It’s not that the US crops are improving that is causing the drops if you believe the weekly crops ratings reports. In the latest week, US corn that is good or excellent fell 1 percent to 57 percent. Last year it was 71 at this time.

Crop progress continues to lag, and the 2-week forecast is for below normal temperatures. This will slow development, especially in corn. Only 23 percent is in the dough stage; last year it was 54 percent.

Soybean ratings held steady at 54 percent good/excellent. Last year it was 67 percent. 72 percent of US soybeans are flowering. Usually, it is around 90 percent at this time of year.

Trump upped the ante in the trade war when he tweeted he would put a 10 percent tariff on another $300 billion of Chinese exports. Apparently, this was because China was not buying as many US ag products as he thought they should.

On the weekend, China responded by saying they would buy no more ag products from the US. One would have thought this would have dropped grain prices drastically, but they took it in stride. Perhaps there is some light at the end of the tunnel?

It now takes over 7 Chinese yuan to buy 1 US dollar. This is the lowest yuan/US dollar rate since 2008. Trump immediately accused China of manipulating their currency. This is a further irritant in the escalating trade war.

The US Federal Reserve cut their base lending rate 25 basis points last week. That is the first drop since the economic meltdown in 2008. Inflation remains subdued and the ongoing trade friction will have a negative impact on growth worldwide.

There is now $15 trillion of investment grade bonds that have a negative interest rate. German bonds have joined the club for the first time. This is more proof that the world economy isn’t operating on all cylinders.

What it also means is that central bankers have limited ability to counter slowing economies with monetary policy should a recession develop. Meanwhile, fiscal policy may be limited also, as most governments are already running huge deficits.

Last week farmers had a chance to check out Hensall Co-op's newly acquired dry bean processing facility at Bloom, Manitoba, located near Portage la Prairie.

CEO Brad Chandler says a number of improvements are being made to the facility.

"We're increasing the cleaning capacity and the performance to get better quality product out," he explained. "We're also adding storage here, receiving legs, receiving conveyors to be able to take more product. Adding a scale for quicker in and out for our producers. It's really to make it more efficient and more effective for their operation."

Hensall President Peter Dinsmore talked about demand for their products.

"Demand is getting higher all the time," he said. "Everybody's maybe looking for a different protein product rather than meat and I think we'll see that demand grow in the future. We have good markets, we sell to 45 countries. It was processed all in Hensall, Ontario, now we're processing out here [Manitoba] too so that saves on logistics of travelling it down to Ontario. Some of what's processed here will head right to the west coast."

Read the full article here:  https://www.pembinavalleyonline.com/ag-news/hensall-co-op-showcases-newly-acquired-dry-bean-processing-facility-video

Watch the video here: https://youtu.be/wiShe4PC7BY

Hensall Co-op celebrated the opening of its new fertilizer blending facility at its Open House and Plot Tour held on July 10th. Attendees were given the opportunity to tour the new state of the art fertilizer blender that can blend up to 750 MT in an hour.  Dekalb, C&M, NK and Croplan provided informative sessions overlooking the plots that are finally coming along following our incredibly wet spring. 

This was followed by the official ribbon-cutting ceremony attended by all four levels of government to illustrate a strong commitment to agriculture in Ontario. Gregg Davidson (Mayor of Mapleton Township), Randy Pettapiece (MPP Perth Wellington), John Nater (MP Perth Wellington) and Senator Rob Black all gave greetings to the audience. 

Brad Chandler, CEO of Hensall Co-op, spoke to the crowd about the key role that the co-operative plays in growing agriculture in Ontario. He stated, “Politics aside, Canadian foodstuffs are sought after because consumers around the world are confident in their quality. The market for plant-based proteins is expanding and the consumption of meat in developing countries continues to grow. We want to see the Canadian Farmer gain from this opportunity and that is why we are focused on growth. This investment was made in our Eastern frontier. We recently entered the market in Tilbury and Harrow to the south. To the west, we have added a processing facility in Manitoba to improve our value stream to get to the Asian Market.” 

Mr. Chandler also congratulated the team on completing the facility on time in tough circumstances. “We believe this is a fantastic facility with innovative equipment and the best employees. The fact it was completed in time despite the challenge of a winter build following a wet spring is a testament to what we can offer to add value to your farms. It's not just the tower – we have new concrete in the warehouse, new liquid fertilizer capability and an office. Thank you to Neil Driscoll and the entire the Drayton team for your dedication throughout Plant19 – it's one we will all remember.”