Oct. 19 — Strong outside world markets and a continuing decline in the U.S. dollar have financial markets showing good gains today. The energy sector is also showing steady gains, which is helping to push the Canadian dollar still further up the chart.
A rather uncertain forecast, showing continued cool wet weather that will no doubt further delay harvest, has helped to push all U.S. grains up with double-digit gains today and Canadian grains are following, but at a lesser extent due to the higher dollar.
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The U.S. dollar fell a quarter of a cent today. The Canadian dollar closed up eight-10ths of a cent today at US97.21 cents.
The Dow Jones December quote closed up 117 points to close at 10,041 today.
Crude oil closed up $1.08 today at US$79.61 per barrel.
Corn closed up 11.6-14.4 cents a bushel today, while beans closed up 14.4-18.6 cents a bushel.
Wheat futures were up 14.6-20 cents a bushel today. Minneapolis December wheat closed up 15 cents a bushel for the day.
Canola closed up $3.30-$9.20 per tonne today.
November Western barley futures closed up $2 at $153 per tonne.
Weekend weather did not allow for much harvesting to get done, and with calls for cold and wet weather this week it doesn’t look much better for a while, so grain markets responded accordingly today with solid gains across the board.
Canola is bumping up against resistance at the $395 level for November and the $399 level for January. If this poor weather persists we may see a push above these levels, which would hopefully mean a short-term runup of $10-$20 per tonne.
The dollar will have a real influence on this potential rally and if it should drop back one or two cents in the short term, a $20 per tonne rally in canola is not out of the question. If and when harvest weather returns, you can expect a pullback in grain futures values, barring any yield-reducing damage being done to the crop before it’s harvested.
Weather markets are always interesting!
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.
