Wittal: Grain’s not budging from local elevators

Jan. 18 — A very quiet market day, as the U.S. markets are closed for Martin Luther King Jr. Day.

The Canadian dollar climbed 0.42 cents to close at US97.5 cents today.  

Canola closed down $4-$5.20 per tonne today. Western barley closed down $2, at $150 per tonne.

With no guidance from the U.S. markets, canola and barley futures fell on pressure from the nice weather, the rising Canadian dollar, no new export buying and continued favorable cropping conditions and harvest reports from South America and Brazil.

There has also been a renewed interest by farmers to sell canola this past week, as the fear that the futures will continue to drop further and not recover has them taking the money and running!

Talking to many producers the past few weeks, the real concern I am hearing is the lack of movement of grain at the elevators. A number of producers have said they have November 2009 canola contracts that they have not been able to deliver yet, and many have not delivered any of their CWB wheat to an elevator, which means very tight cash flow for most producers.

With spring approaching and fertilizer and seed purchases coming soon, you may be able to use some purchasing leverage to get your grain delivered.

If you buy fertilizer from the same company you deliver grain to, you can try to get them to push your deliveries up sooner so you can purchase your spring inputs, or maybe you can make a deal to purchase your inputs based on a cash price, and you don’t have to pay until they take delivery of your grain. That way you get a little savings for the frustration of having to wait to deliver grain.

I have also know grain companies to make a fertilizer sale at a cash price discount, if the producer agrees to sell and prices grain to deliver at a later date, to pay against the fertilizer bill. 

There are many ways to do business that can be advantageous to you and the company you are dealing with. Talk to your reps today and see what they’re willing to consider.

Their job is to buy grain and sell crop products, so if you can come up with an idea that involves limited or no risk for either party, I would think they would look at that and be willing to do business.

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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