Wittal: Watch for wider spread on wheat protein

Sept. 17 –– Financial and energy markets were mixed today, looking as though they were lost and wondering aimlessly with little or no direction.

The U.S. dollar rose slightly today on limited news and trading. The Canadian dollar closed up 0.15 cents, at US93.94 cents.

The Dow Jones September quote finished up 14 points at 9,800.

Crude oil is down four cents, at US$72.47 per barrel.

Corn closed down 5 to 7.2 cents a bushel today. Beans closed mixed, down 10 to up 2.4 cents per bushel on the day.

Wheat futures closed mixed again, up one cent on the Minneapolis to down six cents a bushel on the Chicago and Kansas exchanges. Minneapolis December wheat closed up 0.6 cents a bushel today.

Canola closed down $1.80-$3.20 per tonne today. October Western Barley climbed 70 cents per tonne, closing at $120.70. November futures are up 70 cents at $150.50 per tonne.

Low on high protein

Minneapolis wheat futures have started to show some premium increases being paid for protein, as there seems to be a shortage of high-protein wheat coming off so far in the U.S.

Hopefully this will lead to an increase in protein premiums if and when the Canadian Wheat Board adjusts initial prices in the future. Watch the next pool return outlook (PRO) adjustments coming out the end of September, as they should be an indication if the CWB increases the spread between low-protein and high-protein wheat values.

So for producers who have fixed-price contracts, you may want to deliver your lower-protein wheat on the FPCs and deliver your high-protein wheat into the pool.

The reason is that the current spreads on initial prices for proteins are locked with the guaranteed initial price, so if you deliver high protein against the FPC, you will get the current spread, and that’s it. If you deliver into the pool and the spreads for high protein widen, you will be able to take advantage of that spread when you get your final payment.

Every extra penny in your pocket will make a difference in the end.

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.

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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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