Grainswest - Fall 2026

Fall 2026 Grains West 48 Conditions in the 2026-27 marketing year are relatively extreme, but we can’t dismiss it as exceptional. BY NEIL TOWNSEND Seasonality is real but markets are uncertain MARKET EVERYTHING IS TRUE UNTIL IT’S not. This economics adage suggests rules, truths and traditional pricing patterns termed “seasonality,” are not always useful guides. In its simplest form, sea- sonality is the tendency for grain prices to come under pressure immediately post-harvest and climb in the second part of the marketing year as supplies dwin- dle. By storing grain and using hedging strategies, farmers can counter this with delayed delivery or pricing. In geographies that lack on-farm storage, seasonality is pronounced. It can be created by demand patterns, an imbalance of information, limited com- petition and relatively small, specialized crops. There is undeniable seasonality in crops such as canola, corn, soybeans and wheat. However, it’s imprudent to rely solely on seasonality to dictate pricing behaviour. An individual farmer can do little to influence commodity prices, which are determined by the collective action of end-users and farmers everywhere. Price ideally encourages market clearing as supply equals demand and exchange is facilitated. If supply is too abundant relative to demand, price should go down and vice versa. Futures markets aid point-in-time pricing. They give farmers and end-users the ability to plan and hedge their sale and purchase prices. Just as the spot price is said to incorporate all available information at that point in time, the futures price is based on all available information balanced against probability of certain outcomes. These can include carryover supplies, consumer trends, economics, politics and the impact of weather on yields, but seasonality also influences futures. Seasonality can in turn be influenced by the infrastructure around disposition. Is there a domestic market of substance or is there a heavier reliance on export business? Western Canadian food wheat is overwhelmingly exported beyond the region. In contrast, the domestic canola industry is significant and growing. Both crops demonstrate seasonality, but canola has a more pronounced second-half bias created in part by domestic crush demand. Obviously, marketing strategy is not as simple as waiting until the second half of the marketing year to price your crop. Seasonality can be isolated as having a positive impact often referred to as “all things being equal,” but variables can compound or offset it. This marketing year, seasonality suggests canola spot prices will peak sometime after March. However, current variables contain a trio of unknowns. The Russo–Ukrainian war, the U.S.–Iran con- flict and an upcoming epic El Niño in the forecast. Are the impacts factored into the market, and are they overstated or MONITOR All ingoodtime understated? These factors could over- whelm potential positive impact of seasonality. Conditions in the 2026-27 marketing year are relatively extreme, but we can’t dismiss it as exceptional. Every year sees unique variables and challenges that ap- pear larger and more pressing than they really are. Next year will see a fresh mix of variables that offer opportunity, risk and a new magnitude of seasonality. This often makes incremental selling the best strategy. Seasonality suggests selling in the back half of the year offers potential upside, so a portion of the crop must be reserved for this timeframe. The task is to determine whether the other variables indicate prices have upside or downside and require cashflow and storage. Resist negative inertia and make de- cisions that eliminate risk but maintain opportunity. In 2026-27 this might mean selling 60 per cent in the first half and 40 per cent in the second half because typi- cal seasonality gains are more likely to be washed out by geopolitical and weather influenced price adjustments. Neil Townsend is chief market analyst with FarmLink Marketing Solutions.