July 21 — Financial markets remained steady to up again today, but that wasn’t enough to help grain futures, as they continued to fall due to the ideal growing conditions we’re experiencing across most of North America.
The Canadian dollar continues to climb, with a gain of 0.86 cents to close at US90.34 cents.
The Dow Jones September quote closed up 81 points at 8,886.
Crude oil closed up 74 cents a bushel at US$64.72 a barrel.
Corn closed down 11-13 cents a bushel today; beans ended down 14-19 cents per bushel.
Wheat closed down four to 13 cents a bushel on the various U.S. exchanges; Minneapolis September wheat futures closed down 13 cents a bushel today.
Canola closed down $1.30 to up $2.50 per tonne today.
Barley, meanwhile, closed down $2.60, at $152.40 per tonne.
China has released and sold 500,000 bushels of beans from its reserves and plans on possibly releasing as much as another 1.5 million bushels over the next couple of months. It must be comfortable with the prospects for the new crop if it’s releasing and selling reserve inventories at this time ahead of harvest.
As this nice weather continues, we’re seeing a further liquidation by speculators in the grain futures, which as usual will result in an overreaction in the markets before it’s able to correct itself.
On the wheat market side of things, reports out of Australia are that its wheat crop is going to be two million tonnes larger than last reported, and in India they’re predicting an increase in production of 3.8 million tonnes, which on their own aren’t large increases, but when you add these numbers to an already large world carryout, it doesn’t do anything to support prices.
Corn and barley values continue to fall as livestock numbers, the demand for feedstuffs and the ethanol demand continue to fall off.
Further concerns in Western Canada that the crop is at least two weeks behind normal leads some traders and buyers to believe we will not escape a major frost event this year, which would only mean more feed grains available into a very low-demand market — thus more downward pressure on futures prices going forward.
This is the last full week to get your 2008-09 Canadian Wheat Board deliveries made before the end of the crop year. Talk to your grain company rep if you still have grain to deliver, or call your CWB farm business rep if you need help finding a home for your grain or need to have your delivery contracts adjusted before the end of the crop year, July 31.
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.