Oct. 28 — Financial and energy markets were again on a downward slide today which carried into the grain markets as well. Continued profit-taking is still prevalent but grains did bounce back up off of the daily lows, which is being looked at as supportive going forward.
Continued forecasts for more showers throughout most of the grain-growing region is starting to grab the trade’s attention, as is the possibility that harvest could be delayed further. If this weather persists, you can expect to see the markets turn back around in the short term.
The U.S. dollar was up just over a third of a cent today; the Canadian dollar closed up 1.36 cents today at US92.68 cents.
The Dow Jones December quote closed down 123 points at 9,712 today.
Crude oil closed up $2.09 per barrel today at US$77.46.
Corn closed mixed, down 1.6 cents to up 2.4 cents per bushel today, while beans closed down five to 7.2 cents a bushel.
Wheat futures closed down seven to nine cents a bushel today. Minneapolis December wheat closed down 7.4 cents a bushel for the day.
Canola closed mixed, down $5.23 to up $1.60 per tonne today. The continued dropping dollar kept canola from further losses.
November Western barley futures closed up $2.50 per tonne at $167.
It’s decision time in regards to how you plan to price your CWB wheat. If you are considering using the basis or the fixed price contract you have to commit your tonnes on a contract before 9 p.m. CT this Friday, Oct. 30.
After that, your only option is to deliver into the pool and take the PRO or use the early payment option to lock in the PRO.
With the recent decline in the wheat futures, the basis levels have become more attractive, so you may want to take a close look at doing some basis-only contracts.
The end of October is also the deadline for getting your wheat signed up on a CWB “A” series delivery contract.
Current PRO values for some of the lower grades (No. 3 CWRS) and other classes (CPSR, CWRW) of wheat are not real high, and with more feed wheat being anticipated now with the delayed harvest, the PROs could be under pressure going forward.
Current non-board (NB) feed wheat values are at levels close or equal to what you would net back out of the PRO for those lower grade and classes. Thus, you may want to consider selling NB, so you can move the grain and get your money sooner, as opposed to waiting to deliver based on delivery calls and/or elevator space, then receiving the initial price and waiting eight months for final payments.
Do the math to see what works best for your farm, but do it today, as you have to decide by Friday if you want to put it on a CWB delivery contract or not.
You could hold off signing an “A” series delivery contract and see if you can sell it NB. If that doesn’t work you have the option of offering the grain to the CWB on the “B” series contract by the end of January. The risk is that if the CWB doesn’t have sales for the grain, it may not accept any of it on the “B” series. Then you could be stuck sitting on the grain or selling it for less in the NB market.
Lots of things to think about, and limited time to do it in.
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.