Oct. 13 — Markets are mixed today after a strong showing yesterday, particularly by the U.S. grains, as a result of cold weather over the weekend.
Financial indexes are showing mixed results as the U.S. dollar drops 0.18 cents. Energy markets continue to show strength with crude closing up 88 cents at US$74.15 per barrel.
The Canadian dollar showed good strength, trading over 97 cents today, but dropped down 0.1 cents for the day to close at US96.57 cents.
The Dow Jones December quote closed up five points at 9,824 today.
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Corn closed mixed, down 0.04 cents to up 0.04 cents a bushel today.
Beans closed down four to seven cents a bushel today.
Wheat futures closed up 11-17 cents a bushel today. Minneapolis December wheat closed up 11.6 cents a bushel for the day.
Canola closed up $1.80-$6.10 per tonne today.
November Western barley futures closed down 50 cents per tonne, at $150.50.
Cold weekend weather, frost and potential yield loss in corn and beans have taken over the markets for the short term as the trade tries to assess the damage done.
Forecasts for warmer weather and the hopeful resumption of harvest this weekend have helped to keep markets somewhat in check.
The strength and stability within the Canadian banking sector has our economic situation in far better shape than most countries, which is why our dollar continues to rise.
Some concerns I have going forward are the soaring Canadian dollar and how it will continue to put pressure on Canadian grain prices as we try to remain competitive in an amply-supplied world marketplace.
Another concern I have for grains going forward is the price of crude oil. If it continues to surge upward, back to the $100 per barrel range as is predicted, this would definitely have a negative impact, as we will see world ocean freight rates rise, which will make Canadian grains more expensive for exporters to buy, so prices will continue to be under pressure in order to be competitive on the world market.
Add to that the possibility of a fuel surcharge again for rail freight and local trucking if crude values continue to rise, and the chances for producers breaking even on this year’s crop get pretty slim.
This weather rally may be as good an opportunity as you may have for the next few months to catch up on sale. Know your break-even dollars per acre and be prepared to do some pricing. Set some targets in place so if the markets continue to rally hard, you can take advantage of the opportunity.
That’s all for today. — Brian
— Brian Wittal has spent over 27 years in the grain industry, including as an elevator manager and producer services representative for Alberta Wheat Pool, a regional sales manager for AgPro Grain and farm business representative for the Canadian Wheat Board, where he helped design some of the new pricing programs. He also operates his own company providing marketing and risk management advice for Prairie grain producers. Brian’s daily commentaries focus on how domestic and world market conditions affect you directly as grain producers.
Brian welcomes feedback and information on market conditions in your area, such as current offering prices, basis levels, trucking premiums and special crops contracts. Contact Brian today.
