Grain growers can look forward to strong prices in the first half of this year for most major grains while harvest and weather events will determine prices during the last half.
Moderately higher prices for corn, canola and spring wheat are forecast for the first six months by Farm Credit Canada (FCC).
Lower prices are seen for peas and durum wheat while neutral prices are predicted for red lentils and soybeans. Barley prices will drop.
With the exception of red lentils, all the prices will be above the five-year average.
Weather factors play a key role in canola prices with the projected $520 a tonne price being 11 per cent above the five-year average. Drought has reduced the South American soybean harvest, according to Oil World.
Combined with reduced palm oil production, the shorter supply of oil should keep prices firm.
Forecast spring wheat prices of $256 a tonne sit 16 per cent above the five-year average.
Unexpected Russian export quotas near year end will boost prices as that harvest came in at two-thirds of normal.
Former Wheat Board analyst Bruce Barnett told the Western Producer U.S. wheat futures could jump by 50 per cent from a La Nina created drought. The La Nina droughts usually affect Russian and Black Sea wheat growing areas too.
The U.S. grain handling system is having difficulty moving grain with all the soybean and corn imports by China.
The $267 a tonne yellow pea forecast is 14 per cent under the five-year average price. India, a big market for this crop, has seen heavy monsoon rains that will improve yields.
Durum wheat forecast of $271 a tonne is seven per cent higher than the five-year average. Impacting durum prices are production issues in Morocco and the potential for drought in the Arizona durum growing region.
Feed barley forecast of $228 a tonne is seven per cent below the five-year average.
Red lentil prices, forecast at $554 a tonne, will be $1 higher than the five-year average. Australian competition and stocks in importing country bins affect the price.
Ontario’s predicted corn price of $213 a tonne is 10.5 per cent higher than the five-year average
Soybean prices in Ontario, predicted at $494 a tonne, will be five per cent above the five-year average.
Farmers will benefit from continued low interest rates.
But the price bump from a lower valued Canadian dollar will be reduced. Most analysts predict the Canadian dollar will fluctuate between 75 cents and 80 cents American this year. The dollar floated between 69 cents and 77 cents last year.
Ron Walter can be reached at ronjoy@sasktel.net
