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It is not the stuff of the classic polar vortex we can get in January, but early December feels pretty cold. What is unfortunate is about 30% of the Ontario corn crop is still in the field and as we all know, snow and cold weather don't necessarily mix well with combining corn. Combine sieves can glaze over with ice and, before you know it, a lot of corn is going out the end of the green combine. That is usually followed up by getting the combine into a warm shop to thaw out overnight. Hopefully, we'll have some good weather yet to get this Ontario corn crop in the bin.

For the rest of us who have our crops in, it is the time of year that maybe you wonder where the value of this crop is going. One thing that I never do is invent some market intelligence that I don't have and when it comes to the Ontario cash grain market I double down. Simply put, unless you are a grain merchandiser in Ontario and Quebec, it's difficult to tell what's happening at the cash level. I often have wished that I knew whether farmers were selling or whether they were not at specific price levels. Sometimes, that has a lot to do on where our cash grain basis might be going.

In lieu of not having that cash grain market information, I try to list all the different marketing factors that will affect our grain prices whether that be in the futures market or at the cash level. I've often said that futures markets are easy to understand and cash markets are an enigma, hard to measure. One factor that has been incredibly consistent during the last several months and even the last few years has been the very low value of the Canadian dollar. The noon rate for the Canadian dollar from the Bank of Canada Thursday was 0.7169 US.

As you all know, I've often talked about how Ontario and Quebec farmers need to balance their grain marketing plans to take advantage of futures market gains as well as cash market opportunities. Much of those cash market opportunities has to do with a low Canadian dollar. However, I have seen it in the past where the Canadian dollar moves much quicker than it has done over the last several months which can make it more difficult for farmers who want to price Eastern Canadian grain. We have not seen that lately, but in fact, it's been clear to me with the Canadian dollar hovering at the 71-cent level that our cash prices have been greatly enhanced especially since the futures price rises, we have seen since Oct. 1.

Many would call this a gift from the market. It is very common to hear some of our American futures analysts talk about the somewhat surprising move in soybeans and to a lesser extent in corn since Oct. 1 as a gift we didn't expect. What I am saying is this gift whether you consider it that way or not was enhanced by Canadian dollar hovering in the 71-cent level. As we look out into the future, one of the greatest challenges we will have will be to garner even better cash prices going into January, February and March. Much of this will depend on what futures do as well as if our Canadian dollar continues to stay near the 71-cent US level.

History tells us it will not stay at this level. Yes, you can make an argument if the U.S. president becomes even more aggressive with Canada in the next few months and in the Canadian-United States-Mexico trade renegotiation, we could see the Canadian dollar go back down into the 65-cent level. I have seen that before. However, what we've also seen is a Canadian dollar way above par and in the 80- and 90-cent US level. If we got here, on a successful round of U.S.-Canada trade, we'd likely see a lot lower Canadian grain cash prices.

As always, it is hard to know. However, it is gospel that a low Canadian dollar is a stimulus for Canadian cash grain values. As we sit here on Dec. 4, I would consider that value has sold a lot of grain in the last six weeks. However, as always, we don't know the future ahead.

That future will certainly include record soybean and corn crops coming out of South America in 2026. As you all know, most of the Brazilian soybean crop is planted and is looking very good. In fact, some private analysts in Brazil are talking about 177 million metric tons of soybeans, ditto record production for corn which will certainly way on our futures market as we get into 2026.

I like to tell some of my social media followers when they ask me about prices is I'm holding out for $30 soybeans. In other words, nobody else and what the future holds is yet to be determined, but anybody could be right. The challenge for Ontario and Quebec farmers will be to navigate all of this without losing sight of what we actually control. The market rewards the vigilant, not the nostalgic. Daily market intelligence is key. Stay tuned, stay awake, and don't be afraid to decide when the light turns green. We may all need that resolve before winter lets go.

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Philip Shaw can be reached at philip@philipshaw.ca

Follow him on social platform X @Agridome

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