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Wittal: Traders balk as market slide continues

March 2 — It’s like rolling a snowball downhill. Once you’ve started it heading downhill it grows bigger and there is no stopping it.

The Dow Jones was down over 200 points and crude oil was down $4.61 to close at US$40.15 a barrel. All this did was encourage traders to step back and watch the markets crumble further.

The U.S. dollar jumped up three-quarters of a cent today, which hurt grain futures and pressured them down. The Canadian dollar was down over a cent today to close at US77.70 cents. This helped limit canola’s losses today.

Corn was down seven to 12 cents a bushel, beans were down 26 to 35 cents a bushel and wheat was down 11 to 17 cents a bushel.

Canola was even to down $12 per tonne, and barley finished down 40 cents per tonne for the day.

There was hope that buyers will enter the markets soon, but as I see it, they are going to sit on the sidelines for a little while longer and ride this one down further before they decide to buy any more. They aren’t in a panic and everything is telling them to wait as we haven’t seen the bottom yet and with the Canadian dollar still falling, it makes it even more attractive for buyers to wait it out.

Rains are expected in Argentina this week and dry weather in other parts of South America is helping harvest to progress and with anticipated carryout for 2009-10 for beans in the 380 million-bushel range, bean futures are going to find it very hard to rally any time soon.

Weekly export inspection numbers met expectations for corn and beans and wheat but are still below the weekly average that are needed to hit year-end targets.

Exports need to pick up substantially for all grains in order to stop this slide in the futures we have been experiencing the past month and the only way that will happen is when prices find a bottom here (hopefully soon) and buyers jump back in to take advantage.

It is a buyers’ market right now and we are still on the downhill side of this one for a while longer.

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 a 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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