Wittal: USDA numbers pile pressure on grains

June 30 — The U.S. Department of Agriculture’s acreage and inventory report came out this morning and overall the report was viewed as being slightly negative for all grains.

Corn and bean acres were up more than the trade was guesstimating and quarterly stocks showed higher numbers for the major grains as well. This all adds up to further pressure being applied to the futures, as traders rushed to take profits and reevaluate their positions going forward.

Improved growing conditions will also continue to put pressure on the futures as we progress through the growing season.

Financial markets were mixed to down today, as again there is no real news out there to give the futures any real direction. Also, with this weekend being the July 4 long weekend in the U.S., the trade is probably looking forward to the holiday more than trading the markets, so things will probably drift for the remainder of the week due to limited activity or interest.

The Canadian dollar dropped 0.38 cents, closing at US86.13 cents.

The Dow Jones June quote closed down 86 points at 8,442.

Crude oil closed down $1.60 at US$69.89 per barrel.

Corn closed down 20 to 30 cents per bushel today.

Beans are up 11.2 cents on the nearby month and down two to six cents per bushel on the forward months.

Wheat closed down 11-23 cents per bushel on the various U.S. exchanges.
Minneapolis July wheat futures closed down 15.6 cents per bushel today.

Canola closed up from $1 to $3.50 per tonne today.

Barley finished down $1.50 to close at $169 per tonne, mainly from the selloff seen in corn.

Canadian markets will be closed tomorrow for the July 1 Canada Day stat holiday.

Rolling forward, revised

If you have been thinking about rolling some Canadian Wheat Board wheat deliveries into the next crop year’s pool in the hope of gaining a better return, there are some things to be aware of.

The CWB has changed the process that you must follow in order for you to do this.

First, you have to advise the CWB that you wish to roll tonnes from the old crop year to the new crop year’s pool and today, June 30, is the deadline to do so.

Second, there will be a charge to roll your wheat from one pool year to the other: the current fee is $3.75 per tonne for wheat and $3.25 per tonne for durum.

With the current world wheat inventories that are out there and the fact that if you roll, you will be waiting for another 18 months or more before you get your final payment, I don’t see any advantage to rolling grain from one pool to the other under the present circumstances. For more clarification or answers to questions that you may have, go to the CWB website or call the CWB at 1-800-275-4292.

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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