Manitoba Manitoba: Canada’s canola and wheat crops are facing failure as farmers suffer from continuous drought.
The most important Canadian rapeseed crops used in the production of cooking oils and animal feeds mature weeks early due to the extreme heat witnessed in the region. Early crops may not produce pods containing small dark seeds crushed for oil.
The Canadian prairie grows more canola than any other part of the world.
Farmer Andy Keane fears that only 20 percent of regular rapeseed crops can be harvested.
“My canola is hanging on a thread,” said Keane, 42, as Reuters reported.
According to Keane, canola crops were hit by such a long-term drought 33 years ago.
Due to concerns about drought and heat, canola and wheat futures have reached new highs.
Wheat crops are also at risk in North Dakota, which crosses the border with the United States, with up to 50 percent of the crops dead.
According to the federal government’s Drought Monitor in Canada, ongoing Canadian droughts are spread throughout southern Saskatchewan and Alberta.
The Manitoba state government said in a weekly report on Tuesday that crops were deteriorating rapidly.
Canada’s canola and wheat yields could be millions of tonnes less than previously estimated, said Bruce Burnett, head of market and weather information at Glacier Farm Media.
Farmer Ted Dyke is also worried about what he saw on his farm in Winkler, Manitoba.
“If you don’t know what you’re looking for, it doesn’t seem to be a problem,” he told Reuters.
“There’s been a lot of damage, no doubt,” Dyke said. “I tend to be optimists, but in reality I think I’m looking at at most half the crops.”
In addition, Canadian wheat plant officials expect over-the-counter prices of wheat products to rise by the fall if the country’s crops do not recover.
Canadian farmers face canola, wheat crop failure
Drought shrinks Canada's wheat crop to 14-year low, shrivels canola harvest
Published Monday, August 30, 2021 9:23AM EDT
WINNIPEG -- Drought has shriveled Canada's wheat crop to its smallest in 14 years, and its canola harvest to a nine-year low, a government report showed on Monday.
Parched soils and record-hot temperatures in Canada's western crop belt sharply reduced farm yields of one of the world's biggest wheat-exporting countries and largest canola-growing nation. The drought has forced millers and bakers to pay more for spring wheat, and drove canola prices to record highs.
Statistics Canada, in this year's first report on crop production, estimated the all-wheat harvest at 22.9 million tonnes, down 35 per cent from last year and slightly larger than the average trade expectation of 22.6 million tonnes. Canola production looked set to reach 14.7 million tonnes, down 24 per cent from last year, and also larger than the average trade forecast of 14.1 million tonnes.
"I think buyers around the world have already made major shifts," said Brian Voth, president of IntelliFARM, a farmer advisory service. "A lot of rationing has to happen."
Canola importers may turn to Ukraine, western Europe and Australia for substitutes, while U.S. mills that depend on Canadian wheat to produce flour may need to blend in wheat from other countries, Voth said.
Harvests are small, but not as tiny as some expected, Voth said, adding that some of his farmer clients in Manitoba produced better yields than they expected.
ICE Canada November canola futures were little changed after the report, trading up 0.4 per cent. Canola, a cousin of rapeseed, is used largely to produce vegetable oil.
Minneapolis spring wheat futures also traded slightly higher.
Statscan used satellite imagery and agro-climatic data up to July 31 for the report. It will provide updated crop estimates on Sept. 14.
Canola futures inch toward $1,000 a tonne
As of 11 a.m. CDT this morning, canola futures were trading at $920 per tonne.
That is $20.80 per bushel, and perhaps the highest price ever for a new crop canola contract.
At one point in the morning, canola briefly touched $949 per tonne.
Canola futures have exploded since last Friday as buyers have realized that 35 C weather and the drought across much of Western Canada could severely cut into canola yields this summer.
“The crop damage has really been done,” said Errol Anderson of ProMarket Communications in Calgary.
“We’re hearing that a lot of fields may only be 10 to 15 bushels per acre…. The market has to ration demand. There’s not enough canola for the crusher and the exporter. So, that battle has to unfold.”
Anderson, who has been following commodity markets for more than three decades, has never seen a canola futures market like this one. He described it as “highly unpredictable” because canola futures could trade in a $200 per tonne range of $800 to $1,000 per tonne.
“I really don’t know where they are going,” he said.
“I’ve heard talk where the November (contract) could go above $1,000…. And it may. We’re this high.”
The situation is uncertain because the November contract shot up this week, leaving a gap in the charts. When that happens, the gap usually gets “filled in,” Anderson said.
But it’s impossible to predict when that will happen. It could be tomorrow or it could be weeks from now.
New crop canola futures are in uncharted territory, thanks to a late June and early July heat wave that refuses to subside. Much of the canola crop is in bloom, or was flowering, and the oilseed cannot tolerate 36 C days and warm nights.
Layered on top of the heat, soil moisture is severely limited over a large area, leaving canola to bake in the sun.
The latest sign of a worldwide energy transition: Massive oil refineries across the western U.S. are being converted into biofuel plants.
Phillips 66 on Wednesday became the latest in a string of U.S. refiners to say it’s converting an oil refinery in California into a biofuel plant as gasoline loses its lustre to fuels derived from agricultural and waste products. The company said its 120,000 barrel-a-day Rodeo refinery near San Francisco will become the world’s biggest plant that makes so-called renewable diesel, as well as gasoline and jet fuel, out of used cooking oil, fats, greases and soybean oils.
The announcement came about a week after fuel giant Marathon Petroleum Corp. said that it may convert two refineries into renewable diesel plants. In June, HollyFrontier Corp. said it would turn its Cheyenne, Wyoming, refinery into a renewable diesel plant by 2022.
As refiners across the U.S. struggle with depressed fuel demand and an uncertain future amid the pandemic, California’s fight against global warming is offering a pathway to survival. Demand for so-called renewable diesel is surging in the Golden State where fuel suppliers buy credits from clean energy producers to make up for their emissions as part of a program that’s designed to cut the region’s transportation-related emissions 20 per cent by 2030.
“There is overcapacity on the refining market,” Marijn van der Wal, biofuel adviser at Stratas Advisers in Singapore, said in a phone interview Wednesday. “Are we going to shut down our refineries or are we going to repurpose them?”
Tax credits
The LCFS credits as well as federal RIN D5 credits and recently reintroduced Blenders Tax Credits generate about $3.32 a gallon in subsidies for renewable diesel producers, sufficient to cover production costs, Van der Wal said in a report last June.
“It’s a mind-boggling amount of money,” he said by phone. “You will make a lot of money as long as all these subsidies come in.”
The Rodeo plant is well suited for conversion because of its dock and rail access for receiving the tallows, vegetable oils and used cooking oils that will feed into plant, Nik Weinberg-Lynn, manager of renewable energy projects at Phillips 66, said by phone. The facility has two hydrocrackers that are important to the conversion process as well a plentiful supply of hydrogen. In addition, the plant is located where demand is strongest.
“The California market for the renewable diesel product is certainly the largest in the world,” he said.
Phillips 66 plans to invest $700 million to $800 million in the conversion including constructing pre-treatment facilities, Weinberg-Lynn said. The Rodeo plant could start operating as early as 2024, producing 680 million gallons a year of about 70 renewable diesel, 10 per cent gasoline, and 20 per cent jet fuel, the company said.
Additional project
The San Francisco refinery has an additional project under way that is expected to start up in the second quarter of 2021 and will produce 120 million gallons a year of renewable diesel. Phillips 66 also announced it would be closing its 45,000 barrel-a-day plant in Santa Maria in 2023. The shutdown comes after years of declining retail gasoline sales in the state, according to Energy Information Administration data.
Last week, Marathon said it will convert its 166,000 barrel-a-day Martinez, Cal., refinery into a terminal facility and that may include a 48,000 barrel-a-day renewable diesel plant as soon as 2022. The company is turning its 19,000 barrel-a-day North Dakota plant into a renewable diesel plant by the end of this year.
The surge of new entrants into the California renewable diesel market is creating its own problems, Van der Wal said. So many projects are being proposed that there may not be sufficient diesel demand in California to absorb the additional fuel. Also, existing renewable diesel suppliers to California, including Neste SA and Valero Energy Corp., have locked up much of the feedstock, leaving less tallow and cooking oil for the newcomers.
Phillips 66 hasn’t yet secured all the necessary feedstock for the plant but is confident it can, Weinberg-Lynn said.
“We do firmly believe, while it will be a challenge, that there is enough,” he said.
IT TAKES TWO HANDS TO CLAP
When the Whole World is turning to EV (Electrical Vehicle) one the one hand it must be matched by BIODISEL PRODUCTION On the other hand
ALL EV needs to charge for power by electricity
Currently most electricity is produced by Coal or Crude oil (Both are polluting) So Refineries will Convert to Biodisel for Clean Green Source of Electricity to Power EV
And Both Soybean oil & Palm oil are clean and green because they are biodegradable and got zero sulphur
3) US FED MONEY PRINTING CAUSE PEOPLE TO FLEE PAPER CURRENCY FOR HARD ASSETS LIKE GOLD, SILVER, BITCOIN, ETHEREUM & FARMLANDS
Kiyosaki even predicted that when the stock market sinks, “it’s going to bring everything down with it.”
If you want an asset that has little correlation with the ups and downs of the stock market or real estate, there is one more to consider — U.S. farmland.
Even if the next crash ends up being the biggest in world history, people will still need to eat.
And over the years, agriculture has been shown to offer higher risk-adjusted returns than both stocks and real estate.
New platforms allow you to invest in U.S. farmland by taking a stake in a farm of your choice.
You’ll earn cash income from the leasing fees and crop sales. And of course, you’ll benefit from any long-term appreciation on top of that.
With Canola Oil at World Record prices of USD1,000 & Huge Demand equation for Clean Energy Biodisel Plus Relentless Money Printing Palm Oil Estates & Cpo prices will be sustained.
Warm regards
Calvin Tan
Please buy or sell after doing your own due diligence or Consult competent Remisier/Fund Manager
calvintaneng
Post removed.Why?
2021-11-10 14:00