Under the Agridome

Well, "liberation day" has come and gone, and the world is a new place. It is not the place we became accustomed to over the last 30 years with free trade between the United States and Canada. As Prime Minister Carney said Thursday, the old relationship of steadily deepening integration with the United States is over. He also commented that the 80-year period when the United States embraced the mantle of economic leadership is also over. He went on to say but while this is a tragedy, it is also the new reality.

The same type of words are being said by the other political leaders currently engaged in our federal election campaign. As we move ahead, it is going to be difficult. You will remember my words from the past few weeks where I talked about lower economic growth, higher unemployment, higher prices and fewer choices. As farmers, here we go; we just got more risk heaped up on our table.

I would also be remiss if I did not include my American readers in this. American farm groups have responded to their president's tariffs with caution because they know what happened the last time tariffs were applied. At the moment there are 54% tariffs on Chinese goods coming into the United States. You couldn't blame the Chinese if they never bought one widget of any American agricultural commodities again.

That said, I think it's time to move on from our constant navel gazing on tariffs. I will revisit it when I think it's appropriate. But spring is right in front of us and, as farmers, we'll be hitting the fields real soon. Finding profitable price levels within our grain markets will continue to be a challenge moving forward this spring and summer. Let's delve into the latest news to see if we can find a silver lining.

This past week we got the latest numbers from the USDA in the form of their March 31 Prospective Plantings report. As all you know, in the past this has been a major market mover. It's not so much anymore. However, we should at least look at the numbers. Keep in mind, I always think futures spreads, basis changes and cost of commercial carry are much more important with regard to market direction.

On March 31, USDA put estimated corn acres at 95.3 million. This is up 5% or 4.73 million acres from last year. It was above pre-report estimates. USDA estimated soybean planted area for 2025 to be at 83.5 million acres, down 4% from last year, and just below where pre-report estimates were. The numbers weren't earth shattering as I heard corn numbers a lot higher. However, it means the market did its job over the last few months buying more corn than soybean acres. As every farmer knows, we'll see how it turns out. Mother Nature might have other plans in 2025.

Grain markets were down Thursday, partly reflecting the tariff announcements from the U.S. president. At the present time we've got December corn at $4.47 a bushel. Old-crop May corn is currently at $4.57 a bushel. Old-crop cash corn prices in Ontario range from $5.68 to $6.12 a bushel. New-crop corn ranges from $5.66 to $5.83 a bushel (elevator bids). November soybeans after dropping 20 cents Thursday are at $10.17, with the old-crop May at $10.11. Old-crop Ontario cash soybean prices from $12.48 to $13.25. New-crop soybeans cash prices range from $12.74 to $13.27. Who is excited by those prices?

Don't all stand up and yell at the same time! I know, we've become accustomed to higher prices over the last few years; but remember I emphasize that we need to play defence over the next few months on the farm. Having market orders in while we plant is always a good thing. You never know when those short-term spikes are going to come.

It goes without question those spikes will come. We got through the South American growing season without too many weather problems. However, there still could be a weather problem in the Brazilian safrinha corn crop. Looking beyond that, our North American weather will have just as big of an effect on prices as we move ahead. If Mother Nature decides not to play nice, all bets are off, especially with the lower soybean number just released by USDA. However, I'll just be like the rest of you, hoping that my crop is a bin buster and that there might be a few crop problems somewhere else.

It's no secret the tariffs have taken away the bullish tone in soybeans post-USDA report. It's also no secret that they are the reason for the plunging U.S. dollar, which always affects agricultural futures prices. On cue, the plunging U.S. dollar has brought the Canadian loonie back above $0.70 US. Our marketing balancing act as Canadian farmers just gets more interesting.

This coming week I'm hoping for better things and I'm mainly thinking of the weather. I've been inundated with rain here and a good dry warm period would be welcome. I'm also hoping for a little warm and dry period for our geopolitical landscape. Keep in mind, nobody knows what grain markets will do. However, markets hate uncertainty and we have had lots of that lately. We await the next big market surprise. It will happen when we least expect it.

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Philip Shaw can be reached at philip@philipshaw.ca

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