Good morning,
It looks like the federal Liberals are comfortable running massive deficits without delivering meaningful results. You can’t help but wonder where Canada would be if that level of spending were directed toward real infrastructure—roads, bridges, pipelines, rail, and projects that directly benefit Canadians.
It’s a sad state of affairs. This feels like Trudeau 2.0, only worse.
On the markets—grain spiked hard yesterday and is trading red early today. The question is whether this is just a pause or the start of a second leg higher.
U.S. wheat is in trouble. Much of the crop is ahead in staging, so last week’s frosts may have done more damage than initially thought. Add in minimal rainfall in some regions, along with severe hail and heavy rain events in others, and there are real production concerns.
I was offered $8.35 before yesterday’s rally and set a target of $9.00 on some bushels. Holding grain this year has paid off in a big way. Canola hit $16.59 yesterday.
Even if specialty crops reached $18, they typically yield less, so the comparison still matters.
Crop report:
Saskatchewan is just getting started. About 30 miles south of us, farmers are on day three of seeding—first out of the gate as usual. Some areas further south are also underway. Up north, there are still snowbanks and blocked roads.
For us, I’m still targeting May 8th to start peas, with wheat likely the following Monday.
Grain deliveries are happening daily, so that part of spring is here.
There’s no chance we’re at 1% seeded—more like 0.25%.
On the financial side, the situation with the largest farm in North America raises a lot of questions. Rapid expansion from a few sections to a massive operation typically means one thing: significant borrowing.
From what’s been reported, the issue appears to stem from a missed supplier loan payment, likely tied to FCC. After mid-March, lenders may allow a short grace period, but then they act quickly. That likely triggered a cascade—once a stay is filed, it opens the door for all lenders, and everything effectively freezes.
It’s an unfortunate situation, and it will make lenders more cautious across the ag sector.
I hope they can work through it, but that’s a substantial amount of money outstanding. It also appears there may be no insurance coverage if a premium was missed last year.
It’s going to be a long road ahead.
If I missed anything, feel free to add.
Off to the farm.
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