Wittal: Grain markets fend off profit-taking

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.

June 2 — Financial markets were quiet today with limited activity but at least they were able to stay on the positive side of the charts today.

Concerns over GM going into bankruptcy seem to have already been factored into the markets earlier, so it doesn’t look like it will have any long-term effect on markets now, as the trade sees this as the point in time for GM to start over for the future.

The Canadian dollar closed 0.68 cents higher at US92.52 cents today. Continued weakness in the U.S. dollar is what’s helping to push the loonie higher today.

The Dow Jones June quote closed up 26 points today at 8,714, while crude oil finished down three cents, closing at US$68.55 per barrel.

Corn finished up three to seven cents per bushel today, while beans finished down one to 10 cents per bushel. Wheat finished mixed, from up 16 to down seven cents per bushel on the various U.S. exchanges today, while Minneapolis July wheat futures finished down two cents per bushel.

Canola finished pretty much unchanged, up 20 cents per tonne to down 70 cents per tonne for the day. Long-range weather forecasts for Western Canada show mixed showers but no real major rain events for the next two weeks, so markets are holding steady on potential yield concerns going forward.

Barley finished up $3 to close at $160 per tonne.

There was a bit of profit-taking earlier today in the grains after yesterday’s rally, but markets were able to hold off any big selloff as weather and large fund positions supported the futures at current levels, enabling them to fight off the profit-taking for the most part.

U.S. wheat futures continue to hold strong due to weather concerns, but when you look at world wheat values and find that U.S. wheat prices are $35 to $40 per tonne higher than Russian wheat and $18 to $20 per tonne higher than European wheat, and then remember that world wheat stocks are considered to be more than adequate at this time, you soon realize that prices are going to have to come back into line at some point in time — and will it be U.S. prices falling or other prices rising that will restore this balance?

That is what the market will determine for us.

Weekly progress and crop condition reports are going to become even more critical going forward as the trade is going to be watching very closely and reacting quickly to any changes to crop conditions or yield potential that come out in future reports.

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.

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