FCC's chief economist JP Gervais says it's an interesting time in the ag markets right now.

He points out that a key factor overall right now is the high-interest rates, something he doesn't expect to see change anytime soon. 

Gervais says commodity prices have come down lately and there's a lot of uncertainty going forward as to what the crops are going to look like in the prairies and around the world.

"You know, you look south of the border and some of the challenges that they have with winter wheat right now. That has been giving a little bit of life in the wheat market."

Overall for grains and oilseeds, it's a matter of weaker commodity prices than what we had in recent years, while in the livestock sector, there are a couple of different things happening.

If you look at cattle right now, producers have seen a pretty good run in prices.

Gervais says in the cattle sector it's been about the declining size of the herd that's been driving up the prices that we have right now, coupled with a surprisingly strong demand domestically.

"Domestically, we've had very strong demand, consumers still want to eat beef. We've had some pretty high and significant increases in beef retail prices but nonetheless, if you look at the consumption pattern and what consumers are putting in that food basket they still value quite a bit beef. So beef has been on a good run because we have strength in demand domestically as well as supply numbers that are a little bit lower, and have been trending lower for a number of years now."

Fed cattle prices are a little bit more stable, and feeder cattle prices are still on a positive run, while it's a little bit different, and a little more challenging for hogs and the pork sector.

He points out the export markets have not been kind to the pork sector adding there's a lot of uncertainty with what's been going on in China and their ability to rebuild after years of African Swine Fever.

"Right now they don't need the pork because they're liquidating some of the herd but maybe five, six, or even twelve months from now there might be a little bit of an upward in the demand for pork worldwide. It's a little bit of uncertainty in the strength of demand globally for pork which spills over to the market for hogs and the profitability challenges that producers face right now."

He says there are a lot of different nuances across the different ag markets right now, but overall, we still need to be monitoring the strength and demand domestically, as well as globally.

"In a world where we have a little bit more supply, (thinking grains and oilseeds) and more supply coming to market,  we better have strong demand. I think that's the one key going forward for the marketing season."

Gervais says the most effective solution to the uncertainty we have in the markets right now is a good risk management plan.

To hear Glenda-Lee's conversation with FCC's chief economist J.P. Gervais click on the link below.

The full report is available here.