Jan. 7 — Outside markets were mixed to lower as the U.S. dollar rose almost half a cent today, pressuring energy and grain futures lower.
Announcements out of China of an interest rate hike also impacted beans, as buyers’ costs to borrow will go up, which will have a direct impact on sales going forward.
The U.S. dollar index climbed 46-100ths of a cent today, while gold closed down $2.80 at $1,133.10. The Canadian dollar closed down 0.12 cents at US96.7 cents today.
The Dow Jones March contract closed up 44 points at 10,560 today.
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In the energy sector, crude oil closed down 52 cents at US$82.66 per barrel.
Corn closed down four to 5.2 cents a bushel today, while beans closed down 25-33 cents a bushel.
Wheat markets closed down 6.2 to 10.6 cents a bushel today; Minneapolis March futures closed down eight cents a bushel.
Canola closed down $6.70 to $7.60 per tonne today.
Western barley closed unchanged at $157.20 per tonne.
Weekly U.S. Department of Agriculture export and sales numbers for wheat were very low and corn was also below expectations, which didn’t help grain futures today.
Bean losses
Bean weekly export numbers were on par with expectations, while sales numbers were down substantially for the week, which was part of the reason for the hard pullback in bean futures today.
Speculative traders no doubt jumped on the selling bandwagon as the day went on, in an effort to take out what profits they may have had in their bean contracts, which in turn helped to perpetuate and exaggerate losses in the futures today.
Continued winter storms in some U.S. regions where corn crops are still out in the fields helped to support corn futures, so they didn’t fall as hard as beans or wheat today.
Planning for profitability, and having marketing targets in place for old and new crop, can help keep you away from panic-mode selling brought on by days like this in the markets.
Know your costs and your break-even threshold, so you can better plan for profitable pricing targets for your grains.
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.
