This past week we had the first Canadian federal budget in quite some time. Prime Minister Mark Carney has gotten by with a reputation of being a very smart central banker and I think a lot of people were hoping that that would translate into a good federal budget.

The biggest number starts with $78.3 billion -- that's the federal deficit, something that seemingly never goes away.

In any case it was our federal government's attempt to put together an economic blueprint to blunt the economic attacks from the trade war with our friendly neighbors to the South.

We all know that's not going to go away and it is causing quite a bit of economic pain here in Ontario. At first glance it's always hard to interpret how this might affect us. However, there is a general 15% cutback during the next three years and spending at Agriculture and Agri Food Canada. There are also "super deductions" in the budget which will enable farmers to write off some farm assets in an accelerated fashion. There was also a cancellation of the increase in the capital gains inclusion rate from 50% to 66% which would be made permanent. For political types, I'm sure that this was manna from heaven, but for most people it was warm gruel. The devil is always in the details.

The Liberal Party does not have a majority and in the next few days will look for ways to avoid a budget defeat. At the time of this writing, the news is full of possible defections from some political parties voting every which way.

In the meantime, farmers have corn to harvest. As of Thursday, Ontario was about 40% harvested on corn. I'm trying my hardest to get in that finished category.

Unfortunately, it hasn't been easy this year. It seems like my feeder house chain continues to present me with gremlins. It's a shaft, it's a bearing, it's a soft tire, it's always myriad issues that causes me great challenges when harvesting. What would be better is if we have a similar type of rise in the price of corn that we've seen in the price of soybeans since the Oct. 1.

Unfortunately, we have not seen that. The price of corn is maybe up 13 to 15 cents a bushel since Oct. 1, while the price of soybeans rose about $1.20 at its highest during the same time. Soybeans on Thursday dropped considerably $0.23 as maybe the truth is getting out. It seems our American friends still have a 13% tariff on their soybeans going into China.

When you consider that Brazilian cash values for soybeans have tanked recently, that's not a recipe for increased American soybean sales to China. Of course, the political hype south of the border has been just the opposite. Whatever it was, it did cause that big rise in the price of soybeans. We just need the same type of hocus pocus to take place in the corn market.

We will see as next week we get the November World Agricultural Supply and Demand Estimates (WASDE) report. It will be interesting to see because we missed the October report, and I was quite surprised that we were getting a November report. However, apparently there are some parts of USDA that are not reporting, but the WASDE is considered key this November. Apparently, that's one reason why it's being released.

The question is will we see even bigger corn numbers, or we will we see a reduction in corn yields which may reflect why corn prices have been sideways to higher during the last 30 days.

I have read about a number of scenarios which actually increase the yield of both corn and soybeans going into this report.

However, it is also hard to say. For instance, corn demand has been strong out of the United States. Corn export inspections are coming in at 64% ahead of where we were last year. Ethanol production is at a record at 1.123 million barrels per day. At a certain point this should make a big difference to corn stocks even with the U.S. corn yield over 186 bushels per acre.

The soybean price paradigm is a little bit harder to figure out because it's mixed in with the American Chinese politics. Take that out for a minute and you do hear reports of even bigger yield numbers coming into the collective narrative. However, maybe the Nov. 14 USDA report will just reaffirm that big supply is winning the day yet again.

If Carney was reading this column, he might be interested in the Canadian dollar noon rate Thursday of 0.7048 US. Values this low add so much stimulus to Ontario and Quebec cash grain prices. The question is, what happens next?

That of course is very hard to say. What we do know is that the corn isn't waiting for clarity from Ottawa or a political miracle in Washington. When the WASDE numbers finally arrive, hopefully they'll make a little more sense than the budget. In the meantime, I'll keep wrestling with my combine. The finish line is oh, so close.

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Editor's Note: On Oct. 31, USDA announced that despite the government shutdown, the World Agricultural Outlook Board will release the World Agricultural Supply and Demand Estimates (WASDE) in conjunction with the Crop Production release on Nov. 14. The reports were originally scheduled for release on Nov. 10.

To register for the free DTN WASDE Webinar on Nov. 14, 12:30 p.m. CST and hear reaction and analysis from DTN Lead Analyst Rhett Montgomery, including a live Q&A session at the end of the presentation, go to https://www.dtn.com/….

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The views expressed are those of the individual author and not necessarily those of DTN, its management or employees.

Philip Shaw can be reached at philip@philipshaw.ca

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