July 27 — Financial markets were very quiet today, with limited trading happening, which kept values even to up slightly.
The Canadian dollar continued its climb with a gain of 0.17 cents to close at US92.51 cents.
The Dow Jones September quote closed up 12 points at 9,070.
Crude oil closed up 33 cents a barrel at US$68.38.
Corn closed up five to 6.4 cents a bushel today; beans ended even to down nine cents a bushel.
Wheat closed up two to seven cents a bushel on the various U.S. exchanges.; Minneapolis September wheat futures closed up six cents a bushel today.
Canola closed down $7-$8.50 per tonne today. Barley closed down $1.20 at $147.20 per tonne.
Weekly inspection reports for corn were above expectations, which prompted corn to find some support in the markets today.
Wheat was also able to hold onto small gains today.
Beans and canola felt the effects of lower world palm and bean oil futures from the overnight trade, so they closed with losses today. Improving growing conditions and the rising Canadian dollar are also continuing to put downward pressure on canola futures.
This week is the annual Wheat Quality Council’s tour through North Dakota and surrounding states to inspect the spring wheat crops, to estimate the size and quality of this year’s crop. Early expectations are for a better-than-average crop, yield-wise, and possibly lower-than-average protein because of the cool wet start through most of the region this spring.
Keep an eye on the CWB’s early payment option (EPO) that will be starting Aug. 1 for the 2009-10 crop year. If U.S. and world wheat crops are estimated to yield average or better and you add that to the large carryout of old-crop stocks, you may want to consider using the EPO as a way to establish a floor price for yourself by locking in 80, 90 or 100 per cent of the PRO if you are of the mind that it is going to continue to drop over the next few months as we enter into harvest around the world.
You are able to deliver any grade of wheat, including Canada feed, against an EPO if you so choose. You will have to do some extra paperwork and pay a risk premium if it is Canada feed, though.
For further clarification go to the CWB website, read up on the EPO contract terms and conditions and talk to your CWB rep if you have any questions.
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.