The News & What it Means – Prairie Rain Brings Relief but Uncertainty Lingers

By Dave Milne – June 25, 2019
The news:

“The bulk of the western Canadian production area has seen at least some moisture over the past couple of weeks, with several areas receiving relatively heavy amounts, including the southwestern portions of both Saskatchewan and Manitoba.”

– Syngenta website article, June 24, 2019

What it means:

In a year already beset by vast amounts of uncertainty, the recent Prairie rainfall only adds more.

Let’s not kid ourselves. Every growing season is uncertain, given weather vagaries, soil moisture conditions, disease, pests and so on. But this year, it just feels different.

Some Prairie areas were entering their third straight year of drought this spring. And while seeding moved along quickly as a result, the lack of precipitation from late March/early April had many crops in the driest areas on the brink of failure if they had not already failed. Production guesses were rightly declining. Futures prices for canola were on the rise and a bull market in old-crop barley continued far longer than most expected due to sudden worry over the new-crop supply.

Now, all bets are off. Some crops that may not have been worth harvesting this fall are rebounding and look like they may produce at least a modest yield. Crops that looked ok before, could now have average to even above average yield potential. In fact, the DePutter office has heard from several growers in the driest areas of all three Prairie provinces who told us last week that it was critical their crops got moisture as soon as possible.

Well, the much-needed rain did fall. But unfortunately, it didn’t fall everywhere. Parts of southern and east-central Alberta remain too dry, with some of central and northwest Saskatchewan also still in need of moisture. Southeastern Manitoba could use more rain as well. On the other hand, crops could actually benefit from some drier weather in portions of western and northern production regions of Alberta.

As the maps here show, rain has provided at least some relief to the driest Prairie areas over the past couple of weeks.

Most of the areas that were afflicted by drought conditions at the end of May (shown above), got at least some rain the past two weeks (shown below).

Pests a problem too

As growers have also indicated to the DePutter team, many crops are experiencing higher-than-normal pest pressure as well. The weather over the remainder of the summer is an even bigger wildcard. With near ideal conditions from here on, many farms may yet reap a decent crop or better. But what if things turn drier again?

Across the border, much of the same dilemma is playing out in the American Midwest. Record wet conditions have rendered trying to guess corn and soybean planted area a mug’s game. And there’s far less certainty over the impact persistently wet conditions may have on final yields versus a major drought event. How things ultimately turn out in the US will have a say in the prices Prairie producers will see for their crops in 2019-20.

Beyond the uncertain production prospects, farmers on both sides of the border also continue to face considerable trade risk. In the case of canola, the recent rain may make grain, but if China persists in giving Canada the cold shoulder over the Huawei affair, those additional bushels may have no export destination anyway.

Greater than ever uncertainty means you need a marketing plan even more. Let us help with weekly Market Advisory Service newsletter. Our latest edition also provides coverage that reflects recent rainfall, and also includes many comments from our farmer survey of crop conditions.

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