Oct. 14 — Grain markets tried to rebound after yesterday’s stumble but lost momentum again as the day went on, to close mixed.
Financial indexes showed strong gains today as the U.S. dollar dropped just over half a cent. Crude oil continued to show strength as well, which helped fuel the continued climb of the Canadian dollar as it closed up three-quarters of a cent to US97.3 cents.
The Dow Jones December quote closed up 143 points at 9,952 today.
Crude oil closed up $1.03 at US$75.18 per barrel.
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Corn closed unchanged to up two cents a bushel today.
Beans closed up one to 4.4 cents a bushel today.
Wheat futures were mixed, down 4.2 to up 4.2 cents a bushel today. Minneapolis December wheat closed up four cents a bushel for the day.
Canola closed mixed, up 80 cents to down $2 per tonne today.
November Western barley futures closed down 50 cents per tonne at $150.
Food for thought
The Canadian dollar continues to surge upward against a weakening U.S. dollar supported by positive economic news and rising crude values.
More economic reports are due out this week, such as the manufacturing sales data for August which will be released tomorrow, followed by the consumer price index report for September, to be released Friday. If these reports show improved economic results similar to the job creation report last week, then the dollar will continue to head for parity and beyond, sooner rather than later.
That’s a good thing if you are planning to head out on vacation to the U.S. in the near future, but not so good for grain and/or livestock values if you are planning on selling in the near future.
Now, purchasing power is a different thing and something that needs to be considered seriously as you plan for replacement of equipment or purchasing of inputs that are produced abroad. At current interest rates it may make good financial sense to borrow to do some of these things if the dollar is at par or beyond and before interest rates start to change.
Talk to your dealers to see what kind of an impact a par dollar could have for you if you were to buy, and talk to your banker to see if it makes sense to do something when you crunch the numbers.
You never know when or how long the dollar may stay at par, so it is better to check things out now and be prepared, so if it makes sense to do something you are ready to act when the time is right.
I will be away at meetings for the next two days, so I will not be able to post a market update again until later Friday afternoon.
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.
