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March 4 — Financial markets showed some nice rebound today and that, along with solid gains in crude oil, was all it took to send a positive mood out into other markets including grains.
Non-commercial speculative traders were re-entering the grains today with hopes that maybe we have seen a bottom, and they are in the mood to gamble. This is something we have not seen for a while so hopefully this is a good sign for grains overall.
Crude oil was up $3.73 to close at US $45.38 a barrel. The U.S. dollar was down three-quarters of a cent, which helped grain markets. The Canadian dollar was up almost one cent, closing at US78.52 cents, which held canola futures back, ending in mixed trading with nearby futures up and forward futures down.
Corn was up 11 to 13 cents a bushel, beans were up 12 to 19 cents a bushel and wheat was up 18 to 22 cents a bushel. Canola was up $4 to down $4 per tonne, and barley finished up $2 to $3 per tonne for the day.
Unconfirmed reports that China is back looking to buy U.S. beans and Canadian canola helped keep grain futures positive today. The lower U.S. dollar will no doubt be attractive to buyers and conversely, the higher Canadian dollar may keep buyers away, waiting for it to drop back again.
Wheat futures made solid gains today following beans and corn and news about U.S. winter wheat crops breaking dormancy early, which has some concerned as to what an early frost could do to U.S. winter wheat production.
Reuters reported Wednesday that a lack of rain will cut Argentina’s 2008-09 soy output by 10 per cent compared to the previous season, down to 41.7 million tonnes. That’s according to a special report from the Rosario Grains Exchange on Wednesday.
Corn production in Argentina will be down 36 per cent in the 2008-09 season to 14 million tonnes, the report said.
Argentina, the world’s No. 2 corn and No. 3 soybean exporter, is seeing crops punished by the worst drought to hit the country in decades. But recent precipitation has provided some relief, especially for soy.
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.