Soybeans were the weak link in the grain complex again last week. South American weather has been OK, and forecasts call for periodic rains over the next two weeks. Trump announced there will likely not be any signing of a trade deal before the next US election in October 2020.


This could be because of President Trump’s support of the demonstrators in Hong Kong; especially after the recent landslide win by the pro-democracy side. This has obviously enraged the Chinese government.


This gave speculators the courage to sell a record number of soybean contracts in the latest week. They sold 62,000 contracts or 310 million bushels, putting them net short 43,000 contracts now. Their record short position is 169,000, however.


The record low real and large crop will help Brazil export a record 41 million metric tonnes of corn in 2019. Last year they exported only 22.8 mln mt. However, Rabobank predicts that exports in 2020 will fall to 30 mln mt, as they use more domestically for ethanol and livestock.


US corn is 89 percent harvested, the second slowest pace in the past 20 years. North Dakota is only at 36 percent. Michigan and Wisconsin are only at 66 percent. The slow pace is supporting basis, but not doing much for Chicago.


Ontario is also seriously behind, with little to no progress in the past two weeks due to weather. Most of the corn in fields is high in moisture, and not drying down, due to the wet conditions. Test weight is also an issue, and price discounts are widespread.


Trump has messed up grain markets with his trade policies. However, he hasn’t thrown their farmers completely under the bus. One-third of US farm income in 2019 will come from government sources and subsidized insurance payments.


The $22.4 billion in government aid in 2019 is up 64 percent from 2018, and the highest since 2005. This is helping farmers there cope with the low price, high-cost environment they are operating in.


Unfortunately, Canadian farmers are also caught in the same squeeze. Yet agriculture isn’t on the radar of any of our political parties, federally or provincially, especially in terms of any financial help. The playing field just keeps getting more uneven.


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Prices were lower again for corn and soybeans, over the past week, while wheat prices were firm. Concrete news is still lacking, so prices remain within recent ranges. Corn and soybeans are both about 35 cents below their October highs, while wheat challenged its Oct high.


Rumors that the China/US trade deal wouldn’t be signed this calendar year didn’t help sentiment. Market participants are getting tired of all the rhetoric, without any real results. This is likely why soybean prices are showing the most weakness.


Corn harvest as of Nov 24 was 84 percent complete, below the normal of 96 percent for that date. That means there are still over 2 billion bushels out in fields. North Dakota is by far the furthest behind, with only 30 percent in the bin.


Many of those unfortunate farmers got hit with a frost before the corn was mature. Their moisture levels are very high, and test weights are very low. Heavy discounts are the result, with some reports of farmers receiving only $2.00/bu.US after drying.


Ontario is also experiencing some of the same in many areas, although not nearly to the extent of the US Northern Plains farmers. Harvest progress remains slow in many areas, as fields are wet, and moisture levels in both corn and soybeans remain too high.


On the demand side, corn exports remain slow. Export sales are at their lowest level since 2012, when prices hit record highs. Demand for corn for ethanol will likely end up 150 miln bu. less than the 5.425 bln bu. USDA is estimating.


Soybean exports are a different story, however. Last week, the US exported 1.943 mln mt of soybeans, the largest weekly total in 2 years. Of that, 1.35 mln mt, or nearly 70 percent went to China. The US is currently the cheapest source of soys.

Chicago Dec. soft red wheat closed at 5.30 today, not far from its Oct high close of 5.32. Meanwhile, Kansas hard red wheat closed at 4.33. The 97 cent discount is the highest in 12 years. Chicago wheat is also at a 26 cent premium to Minneapolis spring wheat futures. This is very rare.


Current prices for the soft red wheat Ontario farmers planted this fall are $6.50 per bushel. With much of the crop looking decent as we head into winter, taking some risk off the table on any further rally may be prudent.


If and when the spreads between the different classes of wheat realign to more normal levels, the greatest pressure would likely be on soft red wheat prices.


Frank Backx

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Grain prices remain in the doldrums, with prices losing more ground in the past week. Corn is now near its worst level in Chicago in 2 months, while soybeans trade at a 1 ½ month low. This isn’t unusual seasonally, as the US nears the end of harvest.


Corn is now 76 percent harvested, up 10 percent in the past week, but still behind the average pace of 92 percent. Soybeans are 91 percent in bins, up 6 from last week. Usually, by now 95 percent are off.


The Ontario corn and soybean harvests are further behind than that in most of the US. Corn is drying down at a slow rate, which isn’t unusual for this time of year. The recent wet weather and damp forecasts obviously won’t help that situation either.


China has resumed poultry imports again from the US. The week before, they announced they were going to increase meat imports from Canada also. They need more meat protein as they deal with the African Swine Fever that has decimated their hog numbers.


Despite these announcements, US livestock futures weakened. Cheap grain prices throughout the world are giving incentives for producers to increase their herds. Eventually, this will increase feed demand, but it is a slow process.


South America is expected to see regular rainfall over the next week or two. This is also contributing to the lower prices in Chicago. Some areas in the south are dry. December and January weather will determine their crop sizes.


US exports of grain have been poor lately, due to the ongoing trade war and stiff competition from other sellers, such as Russia. However, international prices are firming, which should allow the US to get back some of the customers they lost.


Outside markets also remain quiet for the most part. US stocks again traded at new record highs.  There seems to be some disconnect between main street and Wall Street. Other than employment, most economic indicators aren’t firing on all cylinders.


With interest rates still near record lows, investors keep putting more dollars into stock markets. The major US stock indices are up over 20 percent again in 2019. Because the trend has been up since the recession low in 2009, the rally is long in the tooth by historical standards.


As in all markets, though, the trend is your friend.


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Members and a Guest/Spouse are invited to the



Wednesday, November 27, 2019

South Huron Recreation Centre, Exeter Ontario


Tickets: $5.00 per person


Hensall Co-op Members qualify for one ticket and one for a spouse/guest.

Order your tickets online here, or 519.262.3022


All payments will be at the door. Please have your membership number ready. 


Please have your membership number with you when you attend the meeting. 


Doors open at 9:45 a.m.

Meeting starts at 10:15 a.m.



Update to Win A Smart 55” TV or a Security Camera System

Update your Hensall Co-op membership information

by December 14th, 2019

for a chance to win!

Membership information can be updated on-line here
or by calling Janice Cox at 519.262.3511 ext 251.


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Grain prices were mixed over the past week, and remain rangebound. The biggest news was the USDA report on November 8, and there wasn’t enough there to move markets decisively.


The corn yield was lowered 1.4 bu/acre from the October report to 167 bu. Usage was lowered in every category for a total 100 million bu., which pretty much wiped out the lower production. The carry out (CO) was pegged at 1.91 billion bu, compared to 2.114 for the 2018/19 crop.


The soybean yield was left unchanged at 46.9 bu/ac. Traders had expected a small reduction. Crush was dropped a minor 15 million bu, so the CO increased the same amount from the Oct estimate to 475 million bu.  That is still a nice drop from last year’s 913 million., however.


Wheat fundamentals were tweaked only marginally. The final CO is now expected to be 1.014 billion bu, versus 1.043 predicted last month. The previous crop year CO was 1.08 billion., so the CO is hanging in at just over 1 billion bu.


Brazil weather has improved, with more rain in most areas except the south. It’s too early to kill this crop, but traders’ attention will divert to South American weather over the next few weeks.


US basis levels are firm, with the eastern grain belt trading at a huge premium to the western belt, where supplies are more plentiful. The strength in the former is helping Ontario basis levels trade at higher levels than normal for this time of year.


China is resuming pork and beef imports from Canada, despite a very poor trading relationship since we arrested the Huawei executive for extradition to the US. It is likely more because they need the meat protein than better trade relations.


The roller coaster China/US trade news continues. It’s positive one day and negative the next. With Trump impeachment public hearings starting tomorrow, it is likely China will stall for longer, hoping that he does lose his job. 


Winter conditions are hitting most of the Us and Canada earlier than normal. This will slow harvest activity further. The 8 to 14 day forecasts show a warming trend, and below normal precipitation, however.


There’re still a lot of soybeans out in field, and very little corn off. Hopefully, the better forecast will be right. 2019 has been stressful enough all year for most farmers. A bit of Indian summer would sure be appreciated.

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Soybeans and wheat were a bit firmer over the past week, while corn weakened. There was little in the news to create excitement or disappointment. Large speculator buying was the main impetus for the soybean rally.


In the latest week, they bought another 5500 contracts, to be long 72,300. That is their largest long position since June 2018. Large specs remain short the corn and wheat markets


Harvest is proceeding, and now 52 percent of the corn has been harvested, while 75 percent of the soybeans are in bins. This is still behind the 75 and 87 percent respectively that is normal for this time of year.


October marked the 15th straight month in which precipitation was greater than the long-term average in the Midwest. This is thought to be a record. This is obviously OK during the growing season but is not ideal during planting or harvest.

Ontario harvest progress remains slow. There’s still a lot of soybeans out in fields and corn combining has only just begun in a few areas. The colder temperatures in the forecast could actually be beneficial, especially in the wetter areas.


South America is expected to see normal to above rainfall for the next 2 weeks. This will alleviate any concerns about it being too dry to plant. The best hope for a significant rally in grains would be from dry weather in the southern hemisphere.


The other short-term fundamental bit of news will come out on November 8, when the USDA releases its monthly demand/supply report. Not a lot of change in yield is expected compared to the October version. Corn usage could be lowered, however.


Nothing concrete happened with the trade war. Again, it was all rumours and speculation. However, China has been a much larger buyer of soybeans from the US over the past 6 weeks. China is usually a buyer from US sources at harvest time.


Last week, the US Federal Reserve dropped its short-term interest rate 25 basis points, while the Bank of Canada kept our rates steady. Logic says this should have supported our dollar, but it didn’t. Canada now has the highest interest rates in the G7.


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Prices were lower over the past week, led by soybeans. Often the last part of harvest can cause price weakness. Slow corn exports and ethanol grind aren’t helping that market either.


US corn is 41 percent in the bin. Normally it is 61 by now. Soybean harvest is also lagging at 62 percent, 16 percent behind the average pace.


October has been uneventful, pricewise. Corn has been confined to a 20-cent range for the month. Soybeans have had a 35-cent range, while wheat has traded between $4.85 and 5.35.


Ontario basis levels are as dormant as futures, even though our dollar rose a cent and a half since early in the month. Strong US basis values are supporting our basis here, as US grain companies bid up for the smaller crops.


Large speculators don’t hold any extreme positions in the grains. They are short corn (32,900 contracts) and wheat (12,300 contracts). They are long a relatively small 35,700 soybean contracts.


Soybean harvesting in Ontario is wrapping up. Yields are highly variable, but overall are expected to be less than the past 2 years. There will be very little corn off before November starts, with more rain in the short-term forecast.


The China/US trade war is still very much in the news. Supposedly, Phase 1 is to be signed Nov 17, but don’t hold your breath on that one. There have far too many false alarms already, and what exactly is in Phase 1?


South America is getting more rains, which will help with their soybean planting. Periodic rains later are more critical later when plants are in their vegetative and reproductive stages, as their soils tent to be course.


There wasn’t much movement in other markets either. It’s getting tougher and tougher to write about markets when, so little is happening. Perhaps it’s just the calm before the storm?





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HENSALL, Ontario — October 24, 2019 — Hensall District Co-operative, Inc. (Hensall Co-op), a leading farmer-owned co-operative in the Canadian agricultural sector, today announced that it has pledged $100,000.00 towards the proposed new Ontario Sustainable Crop Research and Innovation Centre at the University of Guelph’s Ridgetown Campus.  Ridgetown’s plans are for a two-phase project.  This pledge is in support of the second phase of the project to construct several specialized research labs for Ridgetown’s 20 plus agricultural scientists replacing the current facilities that have reached their life expectancy.


“We are committed to protecting our rural communities and we direct most of our sponsorship investment to support rural communities and education in agriculture,” says Brad Chandler, President and CEO, Hensall Co-op. “The applied and practical research results from the Ridgetown Campus remain vitally important to our growers.  We need to ensure that these researchers have the facilities and equipment they need to educate our youth, continue to address industry issues and provide scientific results through knowledge transfer to our producers. This gift clearly supports our corporate values of innovation, empowerment, and working together.  The Hensall Co-op Board of Directors, representing over 6,000 farmer-owners, believe that this is an important investment in the future of the Ridgetown Campus and agriculture in Canada.”


“Phase 1 of this two-phase Ridgetown Campus project is in the final stages of architectural design. This phase involves the construction of a $6.0 million Field Crop Services Building that will provide a state-of-the-art workspace for 15-20 crop research technicians, vegetable and field crop processing space and seed storage.  This phase of the project is an investment from the Province of Ontario through the Agricultural Research Institute of Ontario (ARIO). Following construction of Phase 1, we look forward to seeing Phase 2 commence once provincial and/or federal funding is in place,” says Ken McEwan, Director, University of Guelph, Ridgetown Campus. “Today’s commitment of financial support from Hensall Co-op is greatly appreciated. Our Ridgetown Campus Agri-Food Foundation has now raised over $3.8 million in municipal, agribusiness and private support for this capital priority.”



Left: Members of the Executive

Right: Ken McEwan, Director University of Guelph Ridgetown Campus, Brad Chandler, CEO Hensall Co-op, Grant Craven, Vice-Chair, Ridgetown Campus Agri-Food Foundation 


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Grain prices were mixed over the past week. Harvest pressure was countered by better news on the China/US trade front.


US corn is 30% harvested. A year ago, and the average for Oct. 20 is 48%. Some think the recent snowstorm in the Northern Plains (and Canadian prairies) may reduce their corn crop by 200-300 million bushels.


Soybean harvest is 46% done. Usually, 64% is off by now, but US farmers aren’t far behind last year’s 51% in the bin. Up to 40 million bushels of soybeans may also have been lost in those storms.


The ebb and flow in the trade talks continue. The most recent development is that China will allow its importers to purchase 10 min mt of soybeans from the US without tariffs.


That is a substantial quantity, but the timeframe wasn’t specified. Perhaps that’s why prices gave back early gains.  It may well depend on how well the South American (SAM) crop is developing.


Planting progress is picking up there, as moisture levels in many areas have increased. Soybean acres are likely to increase from last year also at the expense of corn, as freight remains a big expense for Brazil farmers.

With US harvest nearing half done, traders will increasingly focus on South America growing conditions. USDA’s soybean carry out estimates have come down sharply, making SAM output more critical.


Technically, November soybean futures traded to their best level in 4 months. The $9.40 to 9.45 level resistance still hasn’t been broken, however. Futures are up $0.94 since Sept. 9, a very nice gift for farmers at harvest time.


The weekly and monthly continuation charts look even more bullish, trading at their highest since June 2018. This may cause the speculators to get out of their short positions and be price supportive. However, taking some risk off the table here may still make “cents”?


The US dollar index was weaker again, helping the Canadian dollar and other currencies. Gold and crude oil also benefitted. Trump keeps tweeting he would like a lower US dollar and interest rates to help spur their economy.


Canada returned Justin Trudeau to a second term, although only a minority this time. Rural Canada is primarily blue, while the large cities went mainly red. Rural issues weren’t even discussed during the campaign.


Obviously urban people have different priorities and expectations compared to their rural counterparts, at least politically. Unfortunately, the latter group are seriously outnumbered.



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