Ontario Grain Farmer
The magazine of Grain Farmers of Ontario
JUNE/JULY 2017
FEATURES
Uncertainty for U.S. agriculture
Edith Munro
Market opportunities in China
Erin Calhoun
The sustainability supply chain
Michael Buttenham
Better future for subsistence farmers
Marika Li
Project Canaan
Megan Veldman
Breaking new ground in Alaska
Melanie Epp
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Same, same but different
Meghan Burke
Leading through change
Rachel Telford
The WBC problem
Shawn Brenneman
WBC 101: ID and control
Tracey Baute, Art Schaafsma, and Jocelyn Smith
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GFO Newsletter for June/July 2017
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PREVIOUS ISSUES
2015-2016 market review
ALL ABOUT THE BASIS
Blair Andrews
(January 2017)
 
WHEN LOOKING BACK at the last marketing year for corn, soybean, and wheat crops, the predictions for large grain supplies to weigh heavily on the markets were realized. But it could have been worse for Ontario grain farmers as the price pain from Chicago was eased by the weaker Canadian dollar. Data compiled by Farm Market News at the University of Guelph Ridgetown Campus, reveals that Ontario basis levels, buoyed by the exchange rate, mitigated the impact of lower Chicago prices.



CORN
The average Chatham-Kent (CK) high cash price in 2015-2016 was $4.58, which was above the 2014-15 average of $4.39. Conversely, the average old crop Chicago price was $3.70, which was slightly below the previous year’s mark of $3.75. The difference was the Chatham basis. The average for 2015-16 was $0.88 compared with $0.64 in the previous year. But it was still tough sledding for the year as the cash price was 17per cent below the previous five-year average of $5.53.

The cash price hit a high of $5.21 on June 8, 2016 with the combination of the Chicago price of $4.31 and a CK basis of $0.90.

Chicago prices hit a seven-year low at the end of the marketing year as the old crop future dropped to $3.16 on August 26, 2016. Favourable conditions in the U.S. prompted the United States Department of Agriculture (USDA) to predict the 2016 crop would be an all-time record. The last time the Chicago price was that low was in September of 2009. The CK high cash price seven years ago was $3.61 as the basis was just $0.45. Helped by the weaker Canadian dollar in August 2016, the basis of $1.15 propped up the cash price at $4.31. The low mark for the cash price (CK high) was $4.24 on April 1, 2016.

SOYBEANS
The average soybean price in 2015-2016 fared better than the previous year and was eight per cent lower than the previous five-year level. The average CK high price was $12.08, which was more than 60 cents higher than $11.44 in 2014-2015. The previous five-year average was $13.15. As for Chicago prices, the average for 2016-2015 was $9.49, which was lower than the previous year’s mark of $9.82 and well below the previous five-year average of $12.85. Again, supported by the lower Canadian dollar, the average CK high basis in 2015-2016 was $2.59, which was well above the previous year’s average of $1.62.

As for the Canadian-U.S. dollar exchange rates during the last two marketing years, the average Bank of Canada U.S. noon exchange rate was approximately $1.33 in 2015-2016. For the previous year, the rate was $1.21. With the Canadian dollar trading closer to par during part of the previous five years, the average exchange rate was $1.06.

The high CK cash price was set on June 30, 2016 at $14.58. The low (CK high) occurred on September 4, 2015 at $10.715.

WHEAT
The average Chicago cash price for wheat in 2015-2016 was $4.77, trailing the 2014-2015 average of $5.29, and the previous five-year average of $6.68. The average Grain Farmers of Ontario Pool price for soft red winter wheat was $5.81. In 2014-2015, the average was $6.12 while the previous five-year average was $6.46. 

The high price for the soft red winter Pool in 2015-2016 was set August 10, 2015 at $6.64. The low was $4.60 on July 29, 2016. Chicago’s high was $5.26, set on October 6, 2015 and again on November 4 and 5. The low was $4.08 on July 29, 2016. With large harvests on the way around the world, the Chicago prices in July 2016 dropped to their lowest levels since June 2010. Also of note, the $4.08 mark was also approximately $1 lower than that of July 29, 2015 when the Chicago price closed at $4.96.

For soft white winter wheat, the average Grain Farmers of Ontario Pool price was $7.93 in 2015-2016, which was above the averages for 2014-2015 ($7.09) and the previous five years ($6.77). 

The average price for hard red winter wheat in the last marketing year was $5.90. In 2014-2015, it was $6.67. The previous five-year average was $6.97. For hard red spring, the average Grain Farmers of Ontario Pool price was $5.93. The average for the previous year was $6.39, while the previous five-year average was $7.34.

Blair Andrews is the editor of Farm Market News at the University of Guelph Ridgetown Campus. Farm Market News provides agricultural commodity and market information to individuals, farm organizations, agri-businesses, and government agencies. It is Ontario’s only comprehensive grain and livestock market data provider.

 
 
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