Dec. 3 — Financial and energy markets were mixed today. Gold continues to climb slow and steady, and the U.S. dollar dropped slightly.
Grains showed mixed results, as beans posted gains on the day primarily due to speculative interest, while corn and wheat ended with losses as there was very limited trade happening today, which allowed those markets to drift lower.
Canola followed beans with the help of the lower dollar and ended the day to the upside.
Gold closed up $5.30 at $1,217.80.
The U.S. dollar climbed back up four-100ths of a cent today; the Canadian dollar closed down 0.21 cents today at US94.91 cents.
The Dow Jones December quote closed down 87 points at 10,352 today.
January crude oil closed down 14 cents a barrel today at US$76.46.
Corn was down 3.6-6.4 cents a bushel today; beans were up 13-15.4 cents a bushel.
Wheat markets were down 1.6-4.6 cents a bushel today; Minneapolis December wheat futures were down 4.6 cents a bushel.
Canadian canola futures were up $2.10-$7 per tonne today.
January Western barley futures were up $1.30 per tonne, closing at $161.80 today.
Statistics Canada’s report came out with even higher numbers for canola and wheat production than the trade was expecting. Canola was pegged at 11.8 million tonnes, while the trade was estimating an 11 million-tonne crop. Wheat was pegged at 26.5 million tonnes, while the trade estimate was 25 million. Barley tonnage was pretty much as expected, while oats and flax were below expected levels, which should help to support pricing for those grains going forward.
The canola market should have reacted more negatively that it did today, had it not been for a strong rebound by beans and a continuing falling Canadian dollar. Also, reports that a vessel of canola is being loaded bound for China has the trade hoping we may see a return to more normal business levels with China. That would certainly ease some concerns of late about losing our major canola export market.
If exports to China resume and can get back on track, I would expect we should see some adjustment (narrowing) of basis levels in the country by the grain companies once they need to buy more canola to cover sales. A good time to hold tight and wait and see what happens.
It looks like the engineers’ strike at CN is over and the engineers will be returning to work, which is good news as we do not need to see a slowdown or stall-out in exports from Canada with the economy as fragile as it is right now.
Canada’s employment data for November will be released tomorrow and it’s believed the report will show a growth in jobs in November — further indications that our economy is improving slowly!
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.