Nov. 16 — Financial markets showed some real strength today as gold pushed to new highs of $1,139. Reports that the U.S. will keep interest rates where they are helped the U.S. dollar fall, and news out of Japan that its economy is recovering faster than first anticipated all helped to push markets up past recent resistance levels.
Non-commercial buyers were busy in all markets today as the news on interest rates has them believing a lower U.S. dollar will help revitalize markets and provide profit opportunities for them in the future.
The energy sector followed along due to non-commercial buying, and showed solid gains on the day.
The U.S. grain markets fed on the upward momentum from the outside markets and the dropping U.S. dollar helped to maintain the gains for the day. Resistance levels in all grains were broken through, prompting speculators to take aggressive positions looking for further upward momentum and profit opportunities.
Canadian canola futures are up week over week as U.S. beans continue to support canola for the time being.
The U.S. dollar was down almost half a cent today; the Canadian dollar closed up 0.46 cents today at US95.54 cents.
The Dow Jones December quote closed up 126 points at 10,368 today.
Crude oil closed up $2.55 a barrel today at US$78.90.
Corn closed up 9.6 to 11.6 cents a bushel today, while beans closed up 18.4 to 23.4 cents a bushel.
Wheat futures were up 18.4 to 24.2 cents a bushel today. Minneapolis December wheat closed up 18.4 cents a bushel today.
Canadian canola futures were up $6.60-$7.90 per tonne today.
January Western barley futures closed up $1.50 per tonne at $158 today.
The U.S. harvest is progressing, but at a slow pace, and with continued weather disruptions that are supporting the markets for the short term.
This renewed rally is just the pricing opportunity that you may have been waiting for. Keep a close eye on the markets and the news behind the markets daily, as they can fall back as fast as they climbed up.
The jump in the wheat futures today puts the Canadian Wheat Board’s July BPC futures at $236.18 per tonne. If you locked in a basis of +$10 per tonne at the end of October, you are looking at a value of $246.18 for a No. 1 CWRS 13.5 per cent. The PRO right now is at $245 per tonne.
The reason for using the BPC is to give you the opportunity to follow the futures. In the end what you want to do is outprice the PRO and get your money in your hands sooner. It’s about risk management and guaranteeing yourself a profit.
Think about it!
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.