Dec. 21 –– Outside markets were mixed today with gold and energies down, financial indicators mixed and currencies up slightly.
Gold closed down $15.40 at $1,095.40 today.
The U.S. dollar ended up a quarter of a cent today; the Canadian dollar closed up 0.39 cents at US94.22 cents.
The Dow Jones closed up 77 points at 10,348 today.
In the energy sector, crude oil closed down 89 cents a barrel at US$72.47.
Grains ended mixed, with corn holding onto gains as the threat of another snowstorm looms that would stop harvest efforts once again. Beans and wheat drifted lower as market inactivity was very evident which forced further liquidation by some speculators.
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Corn closed up 1.6 to 2.6 cents a bushel today; beans closed down 11-13 cents a bushel today.
Wheat markets closed down 7.2-9.2 cents a bushel today; Minneapolis March futures closed down 8.6 cents a bushel.
Canola closed mixed, down $3.80 to up 80 cents a tonne today.
Western barley is up $1 per tonne today, closing at $161.
The next two weeks during the holidays are going to be shortened trading weeks, so traders are expected to stay out of the markets, which will probably cause markets to drift sideways-to-down going into the new year.
Rumours that Alberta’s Agriculture Financial Services Corp. (AFSC) will not be offering a Spring Price Endorsement program next year are floating out there. It is rumoured that the program is being reviewed and will either be refined or dropped altogether.
If this happens, then producers will have to look to other ways to help protect themselves from a pricing perspective, which could certainly include doing more pre-pricing, which is risky, or using options contracts as a way to provide floor price protection for yourself.
A floor price options contract with an act of God clause would be a good option for the grain companies to offer to producers if they want to secure grain supplies and help producers reduce their pricing and production risks.
As a producer it may be wise to get yourself set up with a brokerage account so that in the future you are prepared, if and when you decide you want to start to use options or futures contracts as part of your pricing and risk management strategy.
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.
