Wittal: U.S. grains lose momentum of falling dollar

Nov. 23 –– Financial markets found new momentum today and regained most of the losses from last week. The energy sector was rather quiet but ended the day with small gains in both crude and natural gas. 

U.S. grain markets started the day with solid gains as speculators tried to push futures in the hopes that they would continue to climb, but little or no interest from the commercial side of the trade soon burst the bubble and grains dropped, closing the day mixed to down with losses in all grains.

Canola followed beans upward in the morning but as the Canadian dollar continued to climb, canola futures started to retrace and ended lower on the day as well.

Gold was steady to up again today, closing at $1,164.70.

The U.S. dollar fell back just over half a cent today.

The Canadian dollar closed up 1.41 cents today at US94.75 cents.

The Dow Jones December quote closed up 119 points at 10,422 today.

Crude oil closed up nine cents a barrel today at US$77.56.

Corn closed down 0.6 to 4.2 cents a bushel today, while beans closed mixed, down four to up 3.4 cents a bushel today.

Wheat futures were mixed, down four to up one cent a bushel today. Minneapolis December wheat closed down 2.4 cents a bushel today.

Canadian canola futures were down $3.60 to $6.20 per tonne today.

January Western barley futures were unchanged, closing at $160 today.

The dropping U.S. dollar kept speculators buying grains with the thought that U.S. grains were going to become more attractive to buyers. Commercial traders and buyers weren’t interested in buying, so the momentum soon ran out and grains fell back and ended lower on the day.

Canola had to fight against a surging Canadian dollar and didn’t stand much of a chance with the Chinese blackleg issue and the U.S. issue of salmonella in Canadian canola meal shipments hanging over the market right now. Buyers are stepping back and waiting to see what will happen next, believing that canola futures are set to take a tumble because of all of these negative concerns.

The contract talks between CN and the union representing its 1,700 engineers have broken off with no further meetings planned for the near future. Doesn’t sound too good.

The union has been given a strike mandate by the members in a vote that was held back in early October, where 89 per cent of the members agreed to strike action if the union feels that’s the only alternative it has left to pursue a settlement of the contract.

Remember when I reported over a month ago that this wasn’t over yet? Well, this isn’t over yet by a long shot.

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.

About the author



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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