Grain markets poised to rebound: analyst

By Nigel Maxwell
February 4, 2018 - 8:00am Updated: February 4, 2018 - 8:36am

A dry, cold winter may be just what grain farmers need according to one industry analyst.

While parts of central Saskatchewan have received above average snowfall this year, southern Saskatchewan is still bare in many areas. 

Market analyst Jon Driedger of FarmLink Marketing Solutions told paNOW, there is a potential for grain markets to move upward this spring if the dry weather continues. 

"There's definitely some concerns about dryness in a lot of parts of western Canada, and there's some caution in the plains of the U.S, potentially in the Midwest," he said.

Wheat and spring wheat were trading at 449-6s and 603-6s when the markets closed on Friday. Driedger said prices are generally sluggish when supplies are adequate, as they have been the past few years, but adds there is a flip side.

"Of course, global demand is pretty good as well, so we do need a large crop to meet that demand," he said.

Driedger said another advantage for grain farmers is that they are starting from a lower base, particularly for corn and wheat.

"A lot of speculative money is on the short side of these markets so if you start to get some shift in sentiment, you get some buying and some reversal of attitudes and those can provide a bit of a tailwind as well," he said.

Agriculture Canada is predicting more farmers in western Canada will plant canola this spring and Driedger said that too could positively impact the grain market.

 

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On Twitter: @nigelmaxwell

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