Our online grain markets columnist Brian Wittal 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.
March 19 — Yesterday’s announcement from the U.S. government, that it will continue to pour hundreds of millions into purchasing long-term debt and mortgage securities to try to keep the U.S. economy from sinking into a deep recession, has added a spark to the markets.
Financial markets were mixed to down today, with the Dow Jones closing down 80 points. The U.S. dollar fell a further one cent today. The Canadian dollar is up three quarters of a cent, trading at US80.78 cents.
Crude oil finished up $3.47 a barrel, closing at US$51.61.
Corn is up eight to 10 cents a bushel, beans are up 25-37 cents a bushel and wheat is up 22-26 cents a bushel. Canola is up $6-$10 per tonne and barley finished down $1.60-$2.10 per tonne today.
The U.S. Department of Agriculture’s weekly export numbers were seen to be neutral for wheat and corn and bearish for beans, but the overall momentum from the continued U.S. bailout pushed everything upward. The falling U.S. dollar will help to encourage continued export business, which is welcome news for the grains.
Canola certainly followed beans higher, but the move was capped by the rising Canadian dollar, as this will make exporters back away if the dollar continues to rise.
Nearby canola basis premiums are disappearing in the country as companies secure enough tonnes to meet their shipment needs. New-crop basis levels are still being offered that are very attractive and should be considered as part of a pricing strategy.
New-crop wheat Fixed Price Contract (FPC) values from the Canadian Wheat Board are equal to or greater than the 2009-10 pool return outlook (PRO) values with the market move today. Is it profitable on your farm? Does it make sense to price some?
The CWB has been doing bin audits in regards to producers with durum on delivery contracts to ensure the accuracy of the tonnes producers are signing up for delivery. As durum is not always 100 per cent accepted for delivery each year, some may overestimate their tonnes to gain a delivery advantage, which is frowned on — and if you are audited and found to be overestimating your tonnes, you will not like the fines that are assessed. If you have questions or concerns you’ll want to contact your local CWB farm business rep to discuss and/or adjust your contracts. It’s better to make the adjustments voluntarily, before an audit, as after is going to cost you.
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.