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Wittal: Wheat rises on speculative shorts

Sept. 24 — Outside markets took a turn for the worse today with double- and triple-digit losses in some of the financial indexes. Energy stocks were also down hard again today and currencies continued the roller-coaster ride with the U.S. dollar up almost nine-10ths of a cent and the December Canadian dollar down 1.27 cents today, closing at US91.84 cents.

The Dow Jones December quote finished down 85 points, closing at 9,635.

Crude oil closed down $3.08 a barrel at US$65.89.

Corn closed up five to 6.4 cents a bushel today. Beans closed mixed, with nearby months down one cent per bushel and forwards up two to five cents per bushel today.

Wheat futures closed up strong, with gains of 10 to 19.2 cents per bushel. Minneapolis December wheat closed up 10.6 cents per bushel for the day.

Canola closed up $4.40-$5.40 per tonne today.

October Western barley dropped 50 cents per tonne, closing at $115.50. November futures closed down 30 cents per tonne at $147.20.

Analysts were somewhat mystified as to the reason for the run-up in wheat today, taking into consideration the negative tone in the outside markets and the sharp rise in the U.S. dollar. Weekly export sales numbers were above expectations, but not by a great amount that would suggest such a strong rebound in wheat today. It was more the result of speculative short coverings that pushed futures higher, as traders tried to squeeze the shorts out on a market run-up.

Canola found some support as new sales were reported at these levels, no doubt sparked by the drop in the dollar. Perfect weather, allowing continued harvest progress and improved yields, is keeping pressure on the futures for the time being, and that may continue to push futures lower in the short term — until a frost hits next week!

Talk to your elevator agent about the option of signing up your wheat or durum tonnes on the Canadian Wheat Board’s GrainFlo program when it opens Oct. 1 at 9:30 a.m. Winnipeg time.

This program has limited tonnage available so it should fill up very fast and the only way to get your tonnes on the program is to have a grain company enter the contract for you on E-services.

It is expected that the durum tonnage will be filled within minutes of the program opening, and the wheat tonnage will take a little longer, but I wouldn’t count on there being any tonnes left by the end of the day Oct. 1.

Talk to your agent or call the CWB to get the details of the GrainFlo program or send me an e-mail if you have any questions.

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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