by JOHN BANCROFT
Statistics Canada reported farm cash receipts for Canadian farmers totalled $15.4 billion during the first quarter, up 7.5% from the same period in 2012. Farm cash receipts include market receipts from the sale of crops and livestock as well as program payments. Receipts increased in every province except Prince Edward Island (-4.3%) and British Columbia (-3.0%). Increases ranged from 0.7% in Quebec to 13.4% in Manitoba. Grain and oilseed prices, which were already at relatively high levels due to increased demand and concerns over tight supplies, rose further during the latter half of 2012 as the drought in the United States worsened. Dry conditions in Eastern Europe and Australia further supported crop prices. On the livestock side, cattle and calf receipts were $1.7 billion in the first quarter, up 0.5% from the same period in 2012. Hog receipts declined $56 million to $956 million, the result of both declining prices (-5.1%) and marketings (-0.4%). In the supply-managed sector (dairy, poultry and eggs), farm cash receipts rose 1.8% to $2.4 billion. Poultry prices drove receipts up 10.6%, while egg prices boosted receipts 7.5%. Dairy receipts fell 2.8%, as both marketings and prices declined. Program payments amounted to $810 million in the first quarter, unchanged from the same period in 2012. Declines in AgriStability and AgriInvest payments were offset by an increase in crop insurance payments.
Crops: Old crop corn based on the July futures closed at $6.62/bu and with a basis of -$0.45/bu gives a spot price of $6.17/bu or $242.90/tonne. New crop corn closed at $5.3475/bu and with a basis of -$0.75 gives a forward contract price of $4.60/bu or $181/tonne. This time last year old crop corn futures were $6.05/bu, basis was -$0.20/bu for a spot price of $5.85/bu or $230/tonne. New crop corn prices a year ago were Dec 2012 corn futures $5.25, basis -$0.65 for a forward contract price of $4.60/bu or $181/tonne. Currently soybean meal FOB Hamilton is $560/tonne compared to $475/tonne last year.
Livestock: The USDA Cold Storage report on Wednesday indicated that total red meat in storage at the end of April was up 3% from last year and up 5% from March 2013. Total beef in storage was down 2% from 2012 and down slightly from March 2013. On the other hand, pork in storage was up 6% from April 2012 and up 8% from March 2013 mainly due to a 12.5% increase in ham stocks. The pork in storage was a record level for the month of April, bearish news for the hog market. The good news from the report was the stocks of bellies in storage was down 25% from April 2012 stocks. Pork cold storage stocks should start declining over the summer months as production decreases and demand responds to the BBQ season.
Disclaimer: This commentary is provided for information only and is not intended as advice