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Wittal: Speculators’ profit-taking weighs on grains

Dec. 17 — Outside markets gave back everything they gained yesterday and then some. An aggressive U.S. dollar started a domino effect as speculators with long positions scrambled to take profits out of the markets, which helped to further feed the downward spiral. Gold ended with double-digit losses today and energies were down as well.

Gold closed down $28.70 at $1,106.80 today.

The U.S. dollar ended up just over seven-10ths of a cent today, while the Canadian dollar closed down 0.62 cents at US93.47 cents.

The Dow Jones closed down 109 points lower at 10,342 today.

In the energy sector, crude oil closed down one cent a barrel at US$72.65.

Corn closed down 11.4-13.2 cents a bushel today, while beans closed down 30.4-37.4 cents a bushel.

Wheat markets closed down 9.6-18.6 cents a bushel today. Minneapolis March futures closed down 15 cents a bushel.

Canola closed down $4.70-$7 per tonne today; western barley is unchanged, closing at $159 per tonne.

U.S. weekly export sales and shipments numbers were strong for corn and beans, above weekly targets, while wheat numbers were again below expectations.

Grain markets were under pressure from the rising U.S. dollar and speculators moved quickly to liquidate positions and take profits out of the markets, as time is running out before the holiday season and a continued aggressive dollar would certainly be the end of upward market movement until the new year.

Canola futures followed beans and ended with losses that were limited by the lower Canadian dollar.

The Canadian Wheat Board announced final payments for the 2008-09 crop year last week. A complete listing of payments for all grades is available online.

If you are on direct deposit, you will have received your payments Monday (Dec. 14). If you wanted your payment deferred you will have to call the CWB at 1-800-275-4292 to see if they can reverse the deposit and hold it until a later date.

All others will start receiving payments by mail by the end of this week, so if you want your payments deferred you will need to send the cheque back to the CWB immediately, requesting your deferral date.

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.

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Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.

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