Farm Business Communications is starting off the new year with a new daily grain marketing commentary for our Alberta Farmer, Grainews, Manitoba Co-operator and Country Guide West websites. It’s prepared by Brian Wittal, who has spent more than 27 years in the grain industry, including as an elevator manager and producer services representative for Alberta Wheat Pool, 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.
Jan. 9 — Markets were on the upswing today, mostly from rumours that soybean stocks will be reduced more than some expect in the upcoming reports on Monday.
This drove speculators to step into the markets and buy futures ahead of the U.S. Department of Agriculture’s reports Monday, looking to cash in on a possible bull market move next week.
Soybeans were up between 28 and 48 cents per bushel and this helped to push most other grains up as well. Corn was up four cents, wheat was up 15 to 18 cents and canola was up $10 per tonne while barley was down $2 to $4 per tonne. Crude oil was down another $1, closing at US$40.83 a barrel.
This might be a good time to talk to your fuel supplier to see what kind of a price guarantee you can get on your spring fuel needs if you pre-buy.
With multiple reports out Monday from USDA, things could get interesting fairly quickly if any of the reports show anything out of the ordinary.
I expect to see further upward strength Monday in beans and canola, but that can change real fast if and when producers start selling again and they will, so be prepared to do the same if we see another $10 per tonne on canola.
Wheat markets will be waiting to see what the estimated acres for winter wheat in the U.S. come in at. Analysts believe it will be down two million acres form last year, so if the report Monday shows a larger reduction than that, I would expect we will see wheat futures jump a little as well. If the estimate is two million acres, expect wheat to continue to struggle and fall because of the surplus world inventory that needs to be consumed.
Corn stats are expected to come in neutral, with little or no impact on markets for the time being, but we have had surprises from USDA before, so you never know!
Any unexpected changes to production, usage or estimated acreages in Monday’s reports could certainly set the stage in the spring for some market maneuvering in an effort to adjust acres between the different crops.
Things could get real interesting or they will stay real flat.
That’s all for this week. Enjoy the weekend. — Brian