Canada Markets

Readers Share Their Thoughts on DTN 360 Poll

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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When asked which crops will require the greatest focus and attention to detail when it comes to price risk management, 42% of responses indicated oilseeds, 25% said all crops were treated equally, while 17% said wheat. Two choices, corn and other crops, were not selected. (DTN graphic by Nick Scalise)

The DTN 360 poll is designed to question readers on their ideas on a number of topics that are viewed as pertinent at the time. Here is a summary of the most recent results.

Prior to the start of the crop year, the following question was asked:

Question: Which crop do you believe will require the greatest focus and attention to detail when it comes to price risk management in the upcoming crop year?

As seen on the attached graphic, the largest response (42%) indicated that oilseeds would require the greatest focus in the 2017/18 crop year. One quarter of responses indicated that all crops were treated the same, while the next largest response (17%) was seen for wheat.

Question: Do you think that spring wheat futures will test the highs reached in early July?

This question ran Aug. 10 to 18 when spring wheat futures had fallen more than 20% from the highs reached in July.

Responses for this poll were concentrated among just two of the five possible responses. Seventy-three percent of responses said yes, supplies of high-protein wheat would prove tight in the end. The balance of the responses answered chose the selectin no, the market is going nowhere fast despite the intensifying drought and declining crop conditions noted on both sides of the border. Responses across the Prairies were interesting. Alberta farmers were unanimous in choosing choice one, which suggests that prices would recover. Manitoba producers were evenly split while two-thirds of Saskatchewan producers leaned towards a recovery in price.

The following week, the question was asked: Tax changes proposed by Canada's federal government have received a great deal of press about the potential impact to high-income doctors and lawyers, but are now suggested to significantly affect farm operations. Will these proposed changes affect your operation?

Given that the consultation period came at the worst possible time for farmers, 8% of respondents were unsure of how the proposed changes would affect their operation. The first three choices received the majority of responses:

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-- 17% chose yes, they will affect our annual tax planning because of changes to income-splitting rules.

-- 9% chose yes, they will challenge our operation's estate plan and planning for capital gains

-- 66% chose yes, they will negatively affect our operation for both reasons above.

While Alberta and Manitoba producers leaned towards the third choice, which made up the 66% as seen above, Saskatchewan producers' responses were more varied with one-third of responses indicated they were unsure of the outcome.

In late August, a question was asked about marketing habits when it comes to selling cash grain off the combine this fall. There was a wide-range of responses for this question.

Question: Will you be a seller of cash grain off the combine this fall?

One-third of responses suggested that selling cash grain was a part of their operation's ongoing strategy due to convenience, bin space issues or in order to generate cash flow. A similar number of responses answered no, given that they were looking for prices to correct higher over time. Seventeen percent were looking to cash sales this fall to avoid even lower prices in the future, while a similar number of responses suggested that they never sell cash grain in harvest.

By province, the largest vote in favor of selling cash grain was in Saskatchewan and Alberta responses, with roughly 50% in favor of selling cash grain this fall, although not necessarily for the same reasons. The highest percentage of producers who never sell cash grains in harvest were in Manitoba, with one-third of responses leaning in this direction.

Between Sept. 9 and 15, the following question was asked: Given the most recent Statistics Canada production and stocks reports, what concerns you the most?

Despite seven choices presented for this poll, responses were highly concentrated in the first two, while showing diverging opinions. Thirty-four percent of responses indicated that Statistics Canada production estimates were understated for many crops, while 44% responded that the same report were mostly overstated. Eleven percent of responses suggested that the year-over-year drop in July 31 canola stocks was overstated, while the balance of responses indicated they had other report-related concerns.

One last question appeared as follows: Do you think that Canada should take action to harmonize wheat grades in order to facilitate two-way movement of wheat across the Canada/U.S. border?

Of the responses, 50% said Absolutely! It's only a matter of time before this becomes a trade irritant on the Trump administration's hit list. Thirty-eight percent of responses said maybe, but more study needs to be done, while the balance of responses said no, this would not be good for the Canadian industry.

This week's DTN 360 Poll asks the following question:

What you think the outcome will be for the proposed tax measure reforms sought after by Canada's federal government as they relate to agriculture. You can weigh in with your thoughts on this week's poll, which is found on the lower-right corner of your DTN Canadian Home Page.

We thank you for your past and future contributions to this poll.

Note: Because of the Canadian Thanksgiving holiday on Oct. 9, the next blog in this space will appear Oct. 10.

To our Canadian readers, have a happy and safe Thanksgiving!

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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