Sept. 18 — Financial and energy markets were somewhat quiet today, ending in a mixed closing.
The U.S. dollar rose a third of a cent today, to finish the week down one-10th of a cent from last week’s close. The Canadian dollar closed down 0.45 cents at US93.49 cents — up seven-10ths of a cent over last week.
The Dow Jones September quote finished up 38 points at 9,838, up 246 points over last week.
Crude oil is down 43 cents a barrel at US$72.04 per barrel, up $2.75 for the week.
Corn closed down 10-12 cents a bushel today, down 1.6 cents for the week.
Beans closed down six to up 12 cents a bushel on the day, up 38 cents a bushel for the week.
Wheat futures closed down two to 6.6 cents a bushel on the various exchanges. Chicago and Kansas exchanges ended lower on the week, while Minneapolis December wheat closed up 2.6 cents a bushel over last week. We are starting to see a premium for higher quality and protein being built into the markets. Hopefully it will last.
Canola closed down $5.50-$7.90 per tonne today, down $4 a tonne from last week’s close.
October Western barley dropped 20 cents a tonne, closing at $120.50, up $7.40 a tonne from last week. November futures are unchanged at $150.50 per tonne.
Markets were quiet for most of the day and it wasn’t until the very end of trade that beans dropped double digits, as traders decided to liquidate contracts based on forecasts that are further delaying a frost event into later next week.
Canola crops in general are said to be mature enough to withstand any real frost damage from this point onward, so the key to a rally is going to be if and when a frost hits in the U.S. and what kind of damage it does on the bean crop.
No doubt futures will jump when a frost hits, just because that’s what the markets are waiting for; the unknown is how high the futures may go, and for how long. This would no doubt have a reciprocal effect on canola futures, and if and when that happens it will be short-lived, so I would look at that as a pricing opportunity.
I’ve noticed that canola basis levels are slowly starting to widen out as harvest progresses. If you are going to need to sell canola over the next several months, you may want to consider locking some basis now while they are at these historically high levels.
It looks like it is time to ramp up sales on canola as the fear of frost damage is almost past, which means we will have ample production for the coming year — and with a large U.S. bean crop and a rising Canadian dollar, waiting to sell may not be the answer this year.
Keep making dust out there, but be safe!
That’s all for his week. — 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.