June 15 — It was a very down day all around. The U.S. dollar rose over a full cent, which sent financial markets into negative territory with triple-digit losses.
However, the drop in the Canadian dollar today did help to temper canola losses. The Canadian dollar closed down 1.2 cents at US88.21 cents.
The Dow Jones June quote closed down 171 points at 8,619. Crude oil finished down $1.42, closing at US$70.62 per barrel.
Corn finished down 17-20 cents per bushel today, while beans finished down 43-52 cents per bushel. Wheat finished down four to 12 cents per bushel on the various U.S. exchanges today. Minneapolis July wheat futures ended down 10.4 cents per bushel.
Canola finished down $11-$14 per tonne for the day. Barley finished down $1.40, to close at $162 per tonne.
The negative start to the financial markets pushed speculative funds to take profits today, which drove corn and beans to take double-digit losses, while wheat wasn’t hit as hard due to rain delays in the winter wheat harvest in some regions.
Canola followed beans down with double-digit losses as well, but the lower Canadian dollar helped keep canola from falling as hard as beans today.
Grain companies are narrowing in their basis levels even more this past week as farmers start to slow down on delivering canola, as this dry weather has them concerned about getting a crop, so now they are content to sit on their old-crop stocks.
There are basis levels for old-crop and new-crop in the Calgary area of +$7.91 per tonne for June/July delivery as well as for January and March 2010 delivery.
The Canadian Wheat Board has estimated that new-crop canola production will be 2.5 million tonnes less than last year’s crop due to frost and dryness across the Prairies.
Viterra announced today that it will buy the Associated Proteins canola crushing plant at Ste. Agathe, Man. The plant has a crush capacity of 1,000 tonnes per day. The price was $64 million, plus working capital. This deal still needs to be approved by the federal Competition Bureau.
Clouds are building and it looks like rain! Here’s hoping.
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.