Feb. 2 — There was continued downward pressure on all grains today as beneficial rains hit a good portion of the drier regions in Argentina over the weekend and forecasts call for continued showers this week. The rains are not enough to repair damage done to yield already, but it will stop yield losses from getting any worse for the time being.
Corn is down eight to 10 cents a bushel, beans are down 19 to 21 cents a bushel, wheat is down two to eight cents a bushel, canola is down $1 per tonne and barley is down $1 to $2 per tonne.
Crude oil futures fell $1.60 to close at US$40.08 per barrel.
The Canadian dollar finished down one cent, closing at US80.35 cents.
The dropping dollar kept canola from taking any bigger losses as we’ve seen in soybeans today.
Farmers continue to refuse to sell canola at these levels, which is also keeping the market from dropping further. If markets don’t improve it will be a matter of time before selling does start and if that’s the case, you want to sell sooner rather than later.
Companies are keeping basis levels tight to attract deliveries from producers to fill cars.
If you are going to sell, make sure and check around as basis levels vary greatly, even within the same company, between delivery points, depending on which stations have shipments for export.
The current South American weather situation will no doubt have oilseed buyers on the sidelines waiting to see if more rains will hit the drought regions.
If this happens, no doubt that will put further downward pressure on bean and canola futures, allowing the buyers to price even cheaper. It’s worth the gamble for them to wait.
It’s a cat and mouse game right now and buyers have time on their side to wait and see what happens.
Pricing for profitability is a long-term strategy that will allow you to prosper.
Being greedy is a gamble; can you afford to take that chance?
That’s all for this 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.