June 25 — Financial markets found some strength and finished with solid gains today. The U.S. dollar dropped two-tenths of a cent today and the Canadian dollar dropped half a cent, closing at US86.36 cents .
The Dow Jones June quote closed up 172 points at 8,472.
Crude oil closed up $1.56 at US$70.23 per barrel.
Corn is down four to seven cents per bushel from yesterday. Beans are up four to 11 cents per bushel on the nearby futures and down three to 11 cents per bushel on the forward months.
Wheat closed down five to 15 cents a bushel on the various U.S. exchanges. Minneapolis July wheat futures closed down 14.4 cents per bushel today.
Canola closed mixed, with futures up $2 to down $1.20 per tonne today.
Barley finished down $1.90 per tonne to close at $166.70.
Grains struggled today even with positive financial markets, higher crude values and a lower dollar. Improved growing conditions are starting to cause traders to step back with a wait-and-see attitude, to see what the weather will do over the next few weeks.
Beans were able to show some strength on the nearby months as old-crop stocks remain tight and sales remain brisk. Canola, however, struggled as growing conditions continue to improve, giving hope that an average crop may still be achievable. If that is the case, then with the old-crop carry out, total stocks for next year are seen to be adequate.
Wheat harvest is in full swing and this is adding pressure to the futures and will continue to do so as the harvest progresses, again because of the sufficient world wheat stocks that exist at this time.
Concerns over the condition of the current western Canadian lentil crop have some in the industry believing prices will continue to slowly push past the current 35 cent-per-bushel range.
A poor start to the growing season that could delay harvest, and now, hot dry weather that could certainly reduce yields, are the main reasons for thinking prices will stay at or push beyond current levels.
India is, of course, the main buyer; a lot relies on what kind of a crop it has and as of right now it’s struggling due to below-normal monsoon rains that could certainly impact yield, forcing it to have to import more from Canada, which would only help to keep prices strong.
Peas may be following a similar pattern, as we have seen a reduction in acres this year over last year and yield potential looks like it will be below last year, so tighter supplies should mean steady to higher prices, which have already been evident over the past month as new-crop prices are slowly rising weekly.
Again, India is the main buyer of peas, so a lot will depend on how its crops fair through the growing season and into harvest.
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.