YORKTON - Grain and oilseed prices in 2022 have been very good, and that is typically the result of some sort of outside force.
Markets react when something is perceived to threaten the usual supply of product.
At present there are some rather significant forces at work in the world which are pressuring markets – if not creating outright fear and panic.
You need only look at recent agricultural headlines in the sector press to see just what is happening that has markets fidgety.
To start with we are still a world in the shadow of a pandemic. Here in Saskatchewan we may have a government that has thrown its hands up in surrender leaving the population to deal with COVID as best they can, but there are still people missing work, finding themselves in hospital, and dying as a result of COVID.
The pandemic might be on its final ripples, but that might also be wishful thinking on our part. Disease mutates and vigilance is still required.
The uncertainty of the pandemic is still a pressure on world trade and its markets.
Then there is the invasion of Ukraine by Russia.
This one is scary, as war always creates market uncertainty and when it is a major power such as Russia, the volatility increases.
On one hand Ukraine is a major producer and the war there will cut into production.
Russia is a major producer too, but who is willing to deal with the war monger-led country?
That will leave some markets wondering where they offset purchases typically made from Ukraine, or Russia.
The spectre of Russian success in the invasion having Putin push into other countries and finally forcing an armed reaction from the west casts a shadow over markets too.
Finally, weather always influences markets.
Here on the Canadian Prairies we are beginning seeding later than recent normal, with acres seeded to-date behind the five-year average.
Late seeding is not the best option, as it has long been understood crops seeded early typically produce better. There are limited early seeded acres in the region this year.
Weekend rains have been a sort of good news / bad news occurrence. On the positive side the rain will improve soil moisture conditions.
On the other hand, wheels won’t be turning for a few extra days because of wet conditions, meaning a lot of acres won’t be touched until the latter part of May.
Certainly, a stretch of warm weather is needed now if every acre is to be seeded in reasonable time.
If weather remains uncertain it will be another factor causing markets to potentially inch higher in the face of stressed demand.
