Wittal: Dollar keeps rising

Our online grain markets columnist Brian Wittal 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.

May 29 — Financial markets regained some more of this week’s earlier losses today, due in part to the slumping U.S. dollar which is improving export sales of products out of the U.S.

The Canadian dollar took a big jump today of 1.64 cents to close the week at US91.44 cents. The dollar has jumped 2.37 cents this week. Strong crude prices, along with gold nearing the $1,000 mark and other commodities’ prices staying high, keep it pushing upward.

The Dow Jones June quote closed up 104 points today at 8,488, up 2.25 per cent this week. Crude oil finished up $1.23, closing at US$66.31 per barrel, up $4.64 or six per cent this week.

Corn finished up five to eight cents per bushel today and up six cents this week. Beans finished up five to 11 cents per bushel today and up 32 cents for the week.

Wheat finished up one to eight cents per bushel on the various U.S. exchanges today. Minneapolis July wheat futures finished up 4.4 cents per bushel today.

Canola finished even to down $1.40 per tonne for the day and down $15 per tonne for the week. Concerns of dryness in Western Canada and the need for a rain soon supported canola for most of the day, but the rising dollar forced futures into negative territory by the end of trade.

Barley finished down $2 per tonne to close at $153.60, down $1.20 for the week.

Fund money continues to pour into the grain markets as weather markets mean potential short-term profits. It certainly looks better than investing in the banking or automotive sectors right now, so who knows how big a position will end up being held by the spec funds over the next month or two, as growing season progresses?

Weekly export inspections for corn were at expected levels while beans and wheat were below levels needed to hit year-end targets. Markets seemed to ignore these numbers today and closed with gains, most likely due to the weather momentum that’s building into these markets and the fund money that’s in play right now.

Reports of frost damage in the central and eastern parts of Alberta from last week’s cold snap have some concerned that reseeding may have to take place in some areas. Hopefully this week’s warm weather can help crops push past the frost and reseeding can be avoided.

The CWB on Thursday released an updated pool return outlook for 2008-09 with CWRS wheat values staying even to down $2 per tonne, durum values up $5 to $6 per tonne and malting barley down $4 per tonne.

The updated PRO for the 2009-10 crop year has wheat up $2 per tonne, durum up $9 and malting barley down $4. World durum markets values have increased, which has helped. The biggest negative factor affecting the PROs is the rising Canadian dollar.

Check the CWB’s website for more details and commentary. That’s all for this week. — 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.


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