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Market remains hot but sales cool

Machinery makers face shortages of parts, supply chain delays, rising costs for labour and transportation as COVID disrupts the business.

Farm equipment sales are down for Canada and United States, with Canada showing significant drops from last year on the largest gear.

This year, four-wheel drive tractors and combines in Canada saw sales fall 22 percent from last season at this time.

American numbers were better, but followed the same trend, with four-wheel drive tractors off six percent and combines down two percent.

“Combines were up last month (year over year in Canada). But down is the trend right now,” said Curt Blades of the Association of Equipment Manufacturers.

“They are selling, but there are a lot of factors at play in a very unusual time for the farm equipment industry,” he said.

Farmers, in many cases, are in positions to buy new equipment this year. High input costs are causing some concern, however even higher commodity prices have left many producers in North America with some optimism about the future and Blades said that has a big influence on sales.

“Trouble isn’t with demand. We have come off two years of white-hot demand. But the manufacturers have found themselves tested to be able to supply it,” he said.

“You might hear in the national news that the COVID-slowed supply chain issues are improving. Maybe up to 80 percent OK, now? But you need 100 percent to deliver a tractor or combine. Eighty percent won’t get it done.”

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Markets Continue to Chase Chinese Trade Headlines

Video: Markets Continue to Chase Chinese Trade Headlines


The U.S./China trade war has escalated after Trump threatened to slap 100% Tariff on China by Nov. 1 after China placed some export restrictions on rare earth minerals.
But Trump overstepped/overreacted but the meeting with Xi at the end of the month was still on even after Trump threatened China with an embargo on used cooking oil. The U.S./China were going to meet and talk about trade issues today ahead of the meeting with Xi/Trump in South Korea.
Despite the increased tensions and noise both the corn and soybean futures held support at $4.10 and $10 with a corrective bounce higher on news that U.S. corn yields are a concern.
U.S. soybean prices are $0.90 to $1.50 cheaper than Brazil.
News that China was willing to remove the tariffs on Canada if Canada would lift the 100% levies on Chinese EV vehicles sent funds short covering in canola futures. Canadian and Chinese met on Friday to discuss ag issues like canola and meat.
Stocks fell on the increased rise in tensions with the U.S./China and concerns over bad regional loans, but investors shake off the news on strong Q3 earnings from the big U.S. banks.
Wheat continued to trade to new 5-year lows while cattle were breaking out to new record highs as Trump was working his magic on lower U.S. beef prices.
U.S. crude oil continued its trend lower as did Bitcoin.