FarmLink’s farmlink’s working crop production estimates as of today are listed below for the major grain and oilseed crops in western Canada.
-Non-durum wheat: 17.6 mln t
-Durum: 3 mln t
– Barley: 7.7 mln t
– Oats: 2.9 mln t
– Canola: 9.6 mln t
– Flax: 617,000 t
– Peas: 2.5 mln t
We wouldn’t share these estimates outside the company if we thought they would impact market price direction. Most analysts in the trade are using figures close to these. In recent weeks, market action has priced a fair amount of the situation into the market already.
In the weeks and months ahead, the real story is going to be how to end users deal with the lack of supply. In some cases, price upside potential will be limited by the availability of cheap substitutes. In other cases, a core amount of inelastic demand will make require higher prices to send buyers elsewhere for what they need.
The most important factor in quite a few cases will be Chinese buying. In the past, they have been assumed to have fairly elastic buying patterns, but a couple of years ago some indications arose that those had changed. Economic growth and the rising incomes of the middle class have seen them import grain at far higher values that the trade previously thought feasible.