“It’s all on raindrops right now,” said Scott Capinegro of Barrington Commodity Brokers.

Recent forecasts for rain have pressured corn and soybean markets, though declining crop conditions could provide support moving forward.

Since last week, soybeans lost 21 cents per bushel in the August contract, while corn lost three in the September contract (all figures US$).

“There is definitely damage done to the crops, corn and beans. The market action though, is very iffy,” Capinegro said.

He thinks both markets will go higher “but we may have to wait until we start harvesting.”

Values could also rise as crop tours scout fields, reporting crop ratings and yields.

“You’re definitely going to want to hear from them that there are problems,” Capinegro said.

However, recent data from the U.S. Department of Agriculture has indicated supplies of both commodities are ample, which is keeping a lid on the market.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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“In some ways you could say it’s a classic weather market,” said Jon Driedger, senior market analyst at FarmLink Marketing.

Prices had gained following dryness in Western Canada.

And while recent showers have pressured prices, they aren’t enough to completely ease traders’ concern about the upcoming crop, which is likely to keep some support in the market.

“Some areas got really good rain, some areas got a trace, and other places got missed more-or-less altogether,” he said.

Rain in the Prairies has been a near-term bearish factor, but Driedger said the dryness had already taken its toll in some areas.

“I think in terms of a bin-busting yield, I think that’s off the table.”

The canola market is especially sensitive to those potential losses, he said, as supplies were tight going into the growing season.

While the supply fundamentals remain somewhat supportive, Driedger said weather is likely to rule how the market moves, which could add an element of unpredictability into trade.

“We’re in a critical window with this canola, and so the next couple weeks with the weather and the forecast, is really going to be important.”

Since last week, November canola advanced about $3 per tonne, ending at $514 on Wednesday.

Other factors traders will be watching include movement in the Canadian dollar and key technical areas.

The loonie gained more than a cent against its U.S. counterpart on Wednesday, after the Bank of Canada announced it would be raising interest rates. If that strength continues it could be bearish for canola.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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Demand on the ingredient side of the flax market has been steady, said Mike Popowich of processing firm TA Foods at Yorkton, Sask.

“But we’ve experienced a bit of a slowdown on the exports. There are ongoing issues with processed flax in China,” and the Flax Council of Canada and government officials are working to resolve the issue, he said.

China in July last year began rejecting flax shipments due to a lack of import standards, the council said in a release.

The restriction still applies to food-grade flax, to date.

China has never had a specification for processed flax for human consumption, “but they started to make something about it over the last year, which has kind of hindered our exports there on cleaned or milled flax,” Popowich said.

That has created a volume build up in the North American market, though the market has held mostly steady, despite the stockpiles.

“Prices are fairly stable, they’ve pretty much flat-lined, since harvest, the supply is still out there right now,” Popowich said.

As for up-and-coming crops, most look generally OK, though market watchers are paying attention to areas of concern in southern and southwestern Saskatchewan.

“That’s led to some speculation, and some farmers holding onto their flax,” Popowich said.

Delivered elevator flax prices in Western Canada are sitting between about $11 and $12 per bushel, according to data from Prairie Ag Hotwire.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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“The acreage numbers are important, but this game right now is all about weather,” said Mike Jubinville of ProFarmer Canada, naming spring wheat as one crop the market had been closely watching.

While estimates for all wheat seeded by Canadian farmers in 2017 are down 3.7 per cent from 2016 to 22.4 million acres, the area seeded to spring wheat is expected to rise 2.5 per cent to 15.8 million acres, Statistics Canada said in its principal field crop areas survey, conducted between May 26 and June 12.

Despite the anticipated increase in spring wheat area, U.S. futures rallied in early activity on Thursday.

“Yield is what makes or breaks crops,” Jubinville said, adding that traders have been focusing on dryness in the Dakotas and Montana, which extended up into areas of Western Canada, namely key growing areas in Saskatchewan.

More recent forecasts show those dry areas expanding into parts of eastern Alberta throughout July.

“So the worry of the marketplace is starting to extend,” Jubinville said.

Crops are especially vulnerable to heat stress this year due to the late start to seeding in Western Canada, meaning a larger portion of the crop is going to be in its reproductive phase and vulnerable to hotter, drier weather.

The canola number came in higher than previously reported by the government agency, reaching record levels, yet canola futures also rallied in early activity on Thursday.

Variability and concerns about crop conditions in Western Canada were factors in the support, while a tightening supply situation limited losses for now.

Canadian farmers reported seeding a record-high 22.8 million acres of canola in 2017, up 12.1 per cent from the 20.4 million acres reported in 2016, Statistics Canada said.

The market needs a 19.5 million-tonne crop to satisfy demand components amid the tightening old-crop situation that’s materializing, Jubinville said.

“I think it [canola acres] could be viewed as kind of neutral — it could be viewed as slightly negative longer-term,” said Jerry Klassen, manager of the Canadian office of Swiss-based grain trader GAP SA Grains and Produits.

Nationally, the total area seeded to barley fell 9.7 per cent from 2016 to 5.8 million acres in 2017, Statistics Canada said.

The barley number can be viewed as slightly bullish, as the figure came in below analyst expectations, Klassen said.

“I think that this shows that farmers stuck with their original plan with the barley,” he said.

Acreage seeded to oats rose 13.6 per cent from 2016, to 3.2 million acres in 2017, StatsCan data said.

While higher than year-ago levels, the oat number was at the low end of trade expectations.

“Some of that had to do with seeding delay issues and acres that just couldn’t get planted in what was a pretty wet area,” Jubinville said.

He named northeastern Saskatchewan, a prominent oat-growing area, as one that may have spurred some of the lower seeded area.

Pulse crop area held mostly stable, with no “real new story.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

Table: StatsCan principal field crop area survey against trade estimates, in millions of acres.

* – Total wheat = Spring wheat + durum wheat + winter wheat remaining after winterkill

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Investors in CBOT corn and soybean markets are rolling out of positions in the July contract into more deferred months.

“With that said, we’re seeing a lot of shorts shore-up positions,” Reilly said, ahead of data from the U.S. Department of Agriculture on Friday.

The government agency is set to release its acreage and grain stocks reports June 30.

Reilly expects USDA data to show implied feed usage was strong last quarter, which could be supportive for corn.

For soybeans, stocks are expected to be heavy, he said.

“Given that there’s probably more soybeans out there then what’s down on paper at the moment.”

If the reports are neutral for soybeans and corn, those markets are likely to inch higher in the aftermath, as weather models indicate a drier and warmer outlook in the U.S. for mid-July.

A generally weaker U.S. dollar is also expected to act as a supportive feature in commodity markets in the near term, Reilly said.

Since last week, corn prices lost 12 cents per bushel in the July contract, which closed at $3.5675, while the September contract declined close to 10 cents per bushel, ending at $3.6625 on Wednesday (all figures US$).

Soybeans fell about five cents per bushel in the July contract on the week, ending at $9.14, while the August contract lost 3-1/2 cents, closing at $9.19 on Wednesday.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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U.S. President Donald Trump said earlier in the year he was considering pulling the U.S. from the North American Free Trade Agreement (NAFTA), but later shifted his position to say he will renegotiate the trade deal.

The U.S. dairy lobby released a 15-page document indicating its demands as those talks are expected to move forward. The National Milk Producers Federation and the U.S. Dairy Export Council groups are asking for freer trade in dairy and a reversal of a Canadian industry policy on pricing milk-derived products.

Wally Smith, president of Dairy Farmers of Canada, said his group is more concerned with being able to produce goods for the domestic market than the export market in the U.S.

“We’re not interested in the export market,” Smith said via phone from Washington, D.C. on Friday.

“Our interest is serving the domestic market and continuing to serve the domestic market.”

The industry is looking to the Canadian government for continued support, he added. Multiple government officials have affirmed their support for the supply management system.

There is no clear timeline on when renegotiations of the trade deal could start, though talks are expected to start this summer.

“It’s difficult to know just exactly at this time when it might be,” Smith said.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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The animal rights and vegan advocacy group responsible for capturing the video says that’s not enough, and is pursuing legal action.

Employees at a Vancouver-area chicken farm were caught in hidden camera footage filmed by a volunteer for Toronto-based Mercy for Animals. The footage was broadcast on CTV News on Monday and posted on YouTube Tuesday.

The video, featured prominently on Mercy for Animals’ website, shows workers throwing birds against crates, slamming them on the ground, slapping and stomping on birds and using them to simulate sexual acts. At one point, an employee attempts to rip a live bird in half.

The video shows some of the abuse happening in front of one of the organization’s supervisors.

Five employees, including one supervisor, have since been laid off.

“We are sickened with the footage and want to ensure all our suppliers and producers that this is not reflective of who we are, our fundamental beliefs or behaviour we accept from our employees. We do not condone or tolerate animal abuse,” Dwayne Dueck, president at Elite Farm Services, said in a statement.

Elite is the poultry services company that staffed the chicken catchers in question.

Krista Hiddema, managing director at Mercy for Animals, called the statement and action from Elite Farm Services “disingenuous.”

“Elite Services supervisors were involved in the abuse, and were supervising the abuse,” she said.

Mercy for Animals has since filed legal complaints with the RCMP, the Canadian Food Inspection Agency (CFIA) and the British Columbia Society for the Prevention of Cruelty to Animals (BC SPCA), Hiddema said.

Elite Farm Services said it is also in the process of establishing an advisory committee to review animal care guidelines and to create clear policies and procedures in line with industry standards and practices.

Poultry processor Sofina Foods, for whom the company catches birds, said late Monday it’s “appalled and extremely shocked by the video footage we saw of a few of our supplier’s employees displaying disturbing and unacceptable behaviours that (Sofina) does not in any way tolerate or condone.”

Sofina said Monday it had already asked that the employees involved be “dismissed immediately,” and that other staff be “requalified on the importance of animal care and fully understand the consequences of not following protocols.”

Mercy for Animals also alleged some of the abused chickens at the operation in question can be traced to Loblaws-owned grocery locations.

Loblaws released its own statement regarding the abuse allegations, noting it’s “investigating” the activities.

“We have zero tolerance for any animal abuse and have made it very clear to the supplier that this behaviour has absolutely no place in our food supply chain,” the company said.

Loblaws said it stands behind standards set by the National Farm Animal Care Council, the policies outlined by the Chicken Farmers of Canada, and its own commitment to animal welfare.

Chicken Farmers of Canada, in a separate statement late Monday, said there is “no defense for the mistreatment of birds.”

CFC noted its animal care program is “mandatory, third-party audited, and enforced on every farm,” and if a farm is found not complying with program standards, or is “causing undue suffering” to birds, the farmer is “subject to penalties and the proper authorities will be contacted.”

It can be problematic to use industry groups to regulate how animals are treated, Hiddema said. “This is like the fox guarding the hen house.”

The industry “is incapable of governing themselves,” she said, pointing to Mercy for Animals’ multiple undercover exposes in Canada.

The group has an online petition, calling for Loblaws to adopt meaningful animal welfare policies for its supply chains.

“We know that Canadians are compassionate people; they do not want animals tortured, and we’re asking for Canadians to use their buying power to speak up. And it is only through consumers that we’ll change what will happen in Canada,” Hiddema said.

CFC reiterated Monday that “this kind of animal abuse is not and will not be tolerated. It is not representative of how the industry works as a whole.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Includes files from AGCanada.com Network staff.

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Corn futures have downside potential, gathering influence from wheat futures and crop ratings in the near term.

“I’m looking for an improvement in crop ratings next week, which might put a little light pressure on corn,” said Terry Reilly of Futures International.

The market had a support level at $3.7125, he added (all figures US$). Prices broke below that level on Wednesday.

Spreading between wheat and corn markets has also kept CBOT corn from rallying over the past several sessions, Reilly said.

Beneficial rains in parts of the eastern Corn Belt could add further pressure.

Despite the bearish factors, corn could stay in a choppy two-sided range in the near term, until crop conditions stabilize.

Areas of dryness in the western Corn Belt could also keep some support in the market.

Since last week, corn prices have dropped close to eight cents per bushel in the July contract, closing at $3.77 on Wednesday.

Soybeans are expected to trade in a wide range over the near term, Reilly said. He pegged that range between $9.15 and $9.50 a bushel.

“I think the bean conditions came in below expectations,” Reilly said. “But for now, we’re looking for an improvement, because there’s a lot of good rains coming along.”

Overall, he added, the soybean crop is in good shape, and is mostly planted.

Since last week, soybean prices gained one cent per bushel in the July contract, closing at $9.3175.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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“People are just kind of buying what they need,” said David Newman of Commodious Trading, a Victoria-area company dealing with international trade and processing of lentils, peas, chickpeas, canary seed and flax.

A source of inactivity is the idea that prices will be vastly different once new crop starts to get onstream, he added.

For lentils, expensive product moved into the market, which caused the commodity to be jammed up overseas, another source of stasis.

“If there’s any kind of way to look at it, it’s that everyone has just put themselves in their little protective bubble,” Newman said.

Prices are well off their highs, dropping from values seen in the winter, he said.

Spot prices for green peas are between $8 and $8.75 per bushel, while yellows are between $7.85 and $9.75 per bushel, according to data from Prairie Ag Hotwire on Tuesday.

For lentils, spot prices largely depend on type and quality and are off their highs.

Farmers are concerned about crop conditions at this time of year, though that is a typical feature, Newman said.

Conditions are mostly good in the major growing regions, but he noted significant variability.

“Ask a dozen people, and they’ll give you a dozen different stories depending on what their position is,” Newman said.

“Some places are really good. Some places are really bad, we’ll probably be average.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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The U.S. Department of Agriculture is set to release its supply and demand estimates on Friday.

“There are some trimming expectations to what the ending-stock projections may be,” said Mike Jubinville of ProFarmer Canada.

The estimates will also include the government agency’s first official forecasts of 2017-18 crop production and usage.

Investors still have questions about how much corn was replanted, and the quality of the crop following wet conditions in the Corn Belt.

Soybeans may see an increased number of acres, as area intended for corn or spring wheat may have shifted into the oilseed, Jubinville said.

Once the report is released, traders will be watching the weather to see how the crop shapes up.

“Until such a time that they have a sustained weather threat — and that’s just not on the horizon today — it would be hard for me to suggest significant upside potential,” Jubinville said.

Since last week, corn prices have gained close to 13 cents per bushel in the July contract, closing at $3.8475 on Wednesday, while soybeans advanced about 15 cents to close at $9.3075 (all figures US$).

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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