The R-Brief Vol. 8

Grain Markets 

Canola prices continued to move higher over the last couple of weeks. This week in particular has seen prices holding at roughly $500 CAD/Mt. The upward move is undoubtedly related to the spike in soybean prices, mentioned in more detail below. Additionally, Statistics Canada reported that Canadian farmers will be seeding around four percent less canola than had originally been anticipated. We therefore expect prices to continue rising steadily throughout the growing season, especially if any weather issues arise out West. 

Soybean prices saw a large move to the upside over the last couple weeks, with prices currently sitting just shy of $1,040 USD/Bu. The sharp rise over the last few weeks can be attributed to the unusually wet conditions plaguing Argentinian soybean fields and the very dry conditions affecting Brazilian fields. Additionally, there have been reports in the media regarding a material increase in soybean positions being taken by large funds. In regards to the latter, the number of outstanding Soybean contracts broke records last month. Current prices are at levels last seen in July 2015 - and by far the highest seen so far in 2016. 

Wheat prices also moved higher over the last couple of weeks, briefly making their way above $500 USD/Bu. before falling back to just below $490 USD/Bu this week. Current Wheat prices are still at their highest levels of 2016.
 

Agriculture In the News

Area One Farms Made Headlines Again. The Globe and Mail’s Jacob Serebrin interviewed our CEO, Joelle Faulkner, for a feature in the Monday, April 18th edition of Canada’s most read national newspaper. The article explains the nuts and bolts of our company’s partnership model and explores why our Alberta partner decided to work with us. Read the entire story here.

Canada Farmland Rose 10% in 2015. Farm Credit Canada released its 2015 report detailing increases in farmland prices for each province. The 2015 gains added to the continuous uptrend that began in the early 1990's. 2015's farmland prices were supported by a combination of low interest rates and higher crop income, which have helped maintain a steady demand for farmland assets. Read more about this story via the CBC here.

The Global Farm Equipment Market Expected to Top 198 Billion USD by 2020. This according to a newly released report issued by Research and Markets. Research and Markets are predicting a five percent rise in compound annual growth rate over the next five years. They cite increasing government support in the form of subsidies and supportive market prices for crops as the main drivers of the increase. Tractors will remain the leading farm equipment type, which constituted 36% of the entire market in 2014. Find a link to details about that report here.

The Pentagon Spent $2.3 Million USD Trying to Build a Cashmere Goat Farm in Afghanistan. A pentagon program aimed at building a cashmere goat farm in Afghanistan resulted in a massive failure. While the $2.3 million USD wasted in this endeavour pales in comparison to the $100 billion USD spent fighting the war as a whole, this story provides a perfect microcosm as to why US aid efforts in the embattled country have failed. Read that story via War Is Boring here.

Technology

The FBI Warns Farmers About Hacktivists. The cyber division of the FBI issued a private industry notification at the end of March notifying American farmers of the cyber risks associated with increased use of the internet to support farming operations. Specifically, the Bureau is concerned about the vulnerability of internet-connected farm equipment and farm management software to data breaches. Their biggest concern is a repeat of an incident last fall, in which “hacktivists” from the infamous group known as Anonymous breached the USDA’s private network and leaked the personal data of many of their employees online. Read that story, which includes the actual notice sent out by the FBI, here.

There Will Be Drones. That's the conclusions of a recently released market research report conducted by RnR Market research. RnR noted that while the worldwide market for agricultural drones currently sits at around $495 million USD, by 2022 it is expected to reach about $4 billion USD. Check out a summary of the report here.