The past few years have seen grain market prices experience an unusually high degree of volatility, driven both by traditional factors and unforeseen outside shocks. The current environment suggests uncertainty will remain high. Farms and businesses need all the tools possible to manage risk. Futures and options can help navigate challenging markets, while providing more flexibility than prepackaged contracts or pricing programs. If current markets make you want to understand and manage commodity price risk, join us for a one-day ‘mini’ hedging seminar in Saskatoon or Regina.
 
Introduction to Hedging with Futures and Options - One-day seminars presented by LeftField's Jon Driedger 
    Tues, March 19  in Saskatoon 

    Thurs, March 21 in Regina
For more details or to register: e-mail jon(at)leftfieldcr.com or call (2o4) 9o5-I88I

Space is Limited!

A new calendar year is a good time to start something new. We started 2024 by introducing the Market Strength Scorecard, a data-driven tool that combines several key market indicators to generate a score for each crop. 

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The scorecard doesn’t cover all possible market factors but tracks four measures we think are most useful:

•    Seasonality – A measure of the price patterns that tend to show up in most (but not all) years.
•    Price Momentum – An indicator of how strongly prices are moving (in either direction). 
•    Historical Context – A measure of the current price in relation to its history. 
•    Fundamental Signal – A way to show the strength of the supply & demand situation.

The scores aren't predictive and they're not marketing recommendations. This tool isn't the be-all-and-end-all, but we think the Market Strength Scorecard offers objective data-driven analysis for better decision-making. 

LeftField Commodity Research is pleased to announce that Alyssa Mistelbacher-Newton has joined its team as a Research Analyst. Alyssa brings over a decade of analytical experience in western Canadian and global crop markets to the group, adding depth and capacity to LeftField’s work.

“We are excited to have Alyssa come onboard,” says Chuck Penner, President of LeftField Commodity Research. “You don’t often get the opportunity in our field of work to hire a person with the expertise to immediately slide in and contribute. Alyssa has a personality that will fit right into LeftField’s culture of ‘professional curiosity’. Not only will Alyssa enhance the products and services LeftField already offers but will allow us to explore new research opportunities as well.” 

It’s no surprise the dry conditions and dropping crop ratings are causing people to compare 2023 with the historic 2021 drought. For some crops, especially those grown more in the south, crop ratings are eerily similar. That said, we’ve heard that 2023 crops are maturing earlier than usual and damage may not be as severe. It’s also fair to say the 2023 drought areas aren’t as widespread as 2021, when there were almost no bright spots  across the entire prairies.

We’ve been asked why prices aren’t responding to the dry conditions yet but even back in 2021, prices really didn’t start moving up until the second half of the summer. There’s still time this year to see a price response. Keep in mind, there were big differences when prices peaked in 2021/22; some like durum were as early as September while others didn’t reach their high points until the following spring.

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There’s one other real impact of 2021 on markets in 2023. The negative experience of forward pricing and buying back contracts in 2021 has made farmers much more reluctant to price this year. This could mean more volatility, as buyers need to get more aggressive to build coverage.

We just released the draft report of LeftField's multi-client study "Canada's Canola Industry Outlook". To meet the federal government's Clean Fuel Regulations, industry players have announced 5-6 million tonnes of new crush capacity. This research looks at the potential outcomes from these monumental changes.

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The research starts with the current lay-of-the-land for context of how things could play out. Then we look at the scale of the changes and what would be needed within the industry to allow it to happen. Production scenarios are developed along with projections for Canadian supply and demand. From there, we examine how Canadian and international canola/rapeseed markets could respond to the various scenarios, including prices, production and trade. Finally, we look at spillover effects in other parts of the industry as well as risks to the outlook. 
 

Even though the report is complete, we are still offering it to organizations interested in seeing what's ahead for the industry. Go to the "Contact Us" page and request the proposal, which contains all the details.