GFO’s Market Trend Report

GFO’s Market Trend Report
Dec 28, 2022

By Andrew Joseph
Image by Joe from Pixabay 

Philip Shaw is a farmer in the Dresden, Ontario area. He also compiles the Market Trends Report on behalf of the Grain Farmers of Ontario.

Although Shaw’s report on market trends for December 2022 and January 2023 provides a look at Canada, the US, and globally, will only be presenting his views on the province of Ontario.

Helped along by good weather in October, November and the early part of December, grain farmers were able to ensure a very quick harvest with, as Shaw noted, only the challenge of making storage arrangements across some parts of the province, especially eastern Ontario.

He noted that the continued presence of a low-value Canadian dollar was able “to provide stimulus to Ontario domestic cash grain prices.” He added: “Basis levels have changed a bit from November. The corn basis is slightly lower than November. The soybean basis is higher.”

Shaw said that “the Eastern Ontario corn basis levels are not as high as they usually are compared to southwestern Ontario partly reflecting the big yields, we saw this year in the east. 

“The final numbers are not in on crop size in Ontario this year but expect a soybean yield of 48 or 49 bushels per acre and a corn yield too come in around 170 bushels per acre.

Ed. Note: Back in August, Greg Stewart and Moe Agostino conducted their annual 2022 Great Ontario Yield Tour, a two-week data tour (corn kernel and soybean pod counting) from August 15-26, 2022, at the Derks Elevator in Chesterville, and a second leg culminating on September 1, 2022, at the Discovery Farm in Woodstock.

Stewart, the Maizex Aronomy Lead and Chief Agronomist for the 2022 Great Ontario Yield Tour has reported an estimate of around 48-50 with the final tour estimate at 50.3 bushels per acre (bpa).

Agostino the Risk Management Chief Commodity Strategist added that he believes, “We might just still achieve the second-largest corn crop in Ontario with a final #ONYield22 tour average at 186 bpa.”

Although the estimate for soybeans meshes well with Shaw’s, the corn estimate has a larger divide. want to point out that it’s tour was performed months earlier with perhaps 80 percent of the corn harvest in.

Shaw reasons that in southwestern Ontario, “dryness was the word for much of the growing season and that was reflected in much lower yields for some producers in the deep SW Ontario. However, timely rain even a few concessions over made quite a difference.  The potential was there in 2022 for much bigger crop yields on an Ontario basis, but these dry pockets kept it at bay.”

The market report also noted that old crop corn basis levels are $1.00 to $1.45 over the March 2023 corn futures on December 9th across the province. The new crop corn basis varied from $1.28 to $1.50 over the December 2023 corn futures. 

The old crop basis levels for soybeans range from $4.75 cents to $5.02 over the January 2023 futures. New crop soybeans basis levels range from $4.15-$4.37 over the November 2023 futures. Ontario SRW wheat prices are in the $8.56 range. 

On December 9, 2022, the US replacement price for corn was $9.04 /bushel.

Click here to view Shaw’s full report, including that on the US and global economies.

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