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Wittal: Financial markets drag grains down

Feb. 17 — Well, the long weekend didn’t improve the mood of the markets, that’s for sure.

Financial markets were down hard today and that, along with the U.S. dollar rising sharply and crude falling, sent grain markets into a tailspin. This was primarily due to speculators liquidating contracts for profits in the wake of a hard slide in financial markets.

For this to turn around, we will need some solid “up” days on the financial markets to encourage grains to reverse this bullish trend and start to move upward. Otherwise, we can expect to stay at these lower levels through spring and beyond without something to turn this around.

Crude oil futures fell US$2 to $4 per barrel. March closed at US$34.93 per barrel.

The Canadian dollar fell US1.84 cents today and closed at US79.10 cents. This was the only thing that helped canola fight off even larger losses, as were seen in the beans today.

Corn was down 14 to 15 cents per bushel, beans were down 39 to 55 cents per bushel and wheat was down 20 to 25 cents per bushel.

Canola was down $8 to $9 per tonne and barley finished down $2.60 per tonne for the day.

It’s time to re-evaluate your pricing strategy to date and if you haven’t been doing much, you may want to reconsider, in case things don’t improve.

On a more positive note, the Canadian Wheat Board (CWB) announced an increase to initial payments for wheat of $30 per tonne, $25.80 per tonne for durum and $39 per tonne for designated barley.

If you have delivered grain to the pool account, you will see a cheque in the mail soon from this increase.

If you delivered against a fixed price or basis contract you will not see a cheque from this increase as you should have already received your top-up payment from the CWB to your full contracted value.

The CWB also announced more delivery calls for wheat last week. Please refer to the CWB’s website for more details.

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 a grain producers. He welcomes feedback and information on market conditions in your area, such as current offering prices, basis levels, trucking premiums and special crops contracts.

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Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.

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