Wittal: Favourable crop conditions may hit markets

Jan. 4 — Welcome to the New Year, and a positive start at that! Outside markets were up solidly, as gold achieved double-digit gains and the Dow Jones showed triple-digit gains today. The energy sector also finished with solid gains.

All of this and a dropping U.S. dollar helped to push U.S. grains higher on the day. The U.S. dollar dropped a third of a cent.

Gold closed up $22.50 at $1,117.70 today, while the Canadian dollar closed up 0.38 cents at US95.95 cents today.

The Dow Jones closed up 145 points at 10,585 today.

In the energy sector, crude oil closed up $2.15 at US$81.51 a barrel.

Corn closed up 3.4-4.4 cents a bushel today, while beans closed up 5.6-9.6 cents a bushel.

Wheat markets closed up 12.4-16.4 cents a bushel today; Minneapolis March futures closed up 16 cents a bushel.

Canola closed up 40 cents to $4.90 per tonne today.

Western barley closed unchanged, at $160 per tonne.

The world weather situation has changed somewhat over the past two weeks. Australia has received generous amounts of rain throughout most of its eastern growing region, which has prompted some in the industry there to predict an increase in production of 10 per cent.

Scattered light rain continues to be favourable for developing and emerging corn and soybean crops in Brazil and Argentina. The rain is also helping to keep temperatures down to moderate levels. South Africa is also seeing favourable conditions for its developing maize crop.

In Eastern Europe, variable temperatures and mixed chances for snow and rain in Ukraine and southern Russia are generally good for soil moisture, but erratic conditions could be hard on winter wheat.

So as you can see, things can change quickly and will continue to do so as the growing season progresses in South America and as spring approaches in North America.

These weather changes will no doubt have some impact on markets going forward as crops develop and seeding approaches.

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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