Markets

Genesus Global Market Report: Canada - Counting Our Blessings December 2021

4 January 2022

4 minute read

By: Bob Fraser

North America

For 2021 the challenges of Covid, labour and getting your hogs slaughtered in a timely manner continued and here in much of Canada (Ontario) intensified. Yet as always, our blessings are many. Ontario has had the rare combination of good crop yields and good prices. You can have one or the other but rarely get both together. Ontario corn and soybean harvests are in the final stages. Harvest reports confirm record yields for row crops. Weather was more co-operative in early November, resulting in significant harvest progress. Now everything is virtually complete including fall field work and manure spreading.

With elevator corn bids near $7 CDN/bu and soybeans over $15 CDN/bu. Ontario corn and soybeans are competitive on the world market at current levels. Favourable early November weather resulted in lower drying costs but most of the corn has come off at high moisture. Ontario winter and spring wheat markets are making fresh 52-week highs due to strength in the world wheat market. Local basis levels remain firm due to lower supplies of milling quality.

Quick look

Soybeans: It’s expected Ontario’s soybean crop will be significantly higher than government estimates and the 2020 total (Editor's Note: This article by Jerry Klassen a market analyst and commodity trader for Resilient Capital appeared in the Nov. 29, 2021 print edition of Farmtario, before Statistics Canada released its November crop production estimates on Dec. 3.). Expecting the Ontario soybean crop to come in at 4.4 million tonnes, up from the Statistics Canada estimate of 3.8 million tonnes and up from the 2020 output of 3.9 million tonnes.
Corn: forecasting Ontario’s corn crop will, like soybeans, be much higher than the five-year average. Expecting the Ontario crop to reach 10 million tonnes, up from the September Statistics Canada estimate of 9.6 million tonnes and up from the five-year average output of 8.7 million tonnes.

Wheat: 2021 crop was 2.6 million tonnes, which included 1.8 million tonnes of milling quality and 800,000 tonnes of feed quality. Ontario wheat prices reached seven-year highs in early November. The market should be encouraging production, but the delayed soybean harvest has hindered winter wheat planting. Ontario winter wheat acres will likely drop under one million acres this fall, down from last year’s seeded area of 1.1 million acres

Last commentary, eight weeks ago, Bob Hunsberger, Wallenstein Feeds, Hog Economics Summary Sheet showed profitability per pig with average production at $4.92. Now it has dropped a further twenty-six dollars to (-$21.65). The next twelve-month projection has rebounded from a profit of $8.61 to $15.64. An improved margin but still off the heights we had seen. Reviewing this year’s commentaries: