Glacier FarmMedia COVID-19 & the Farm

Wittal: Dry southern U.S. Plains forecast

Our online grain markets columnist Brian Wittal 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.

March 23 — Financial markets were moving up aggressively today as the recent U.S. government bailout package was seen to be very supportive to the financial sector.

The Dow Jones closed up 460 points — a six per cent jump in one day! The U.S. dollar finished down a third of a cent today.

The Canadian dollar is up 0.81 cents and closed at US81.49 cents.

Crude oil finished up $1.73 per barrel to close at US$53.80.

Corn finished even to down one cent per bushel, beans are up two to four cents per bushel, wheat is even to down two cents per bushel. Canola is even to up $3.10 per tonne, and barley finished down $3.60 per tonne.

Argentine farmers’ unions have called for a week-long strike in protest of the government’s 35 per cent soybean export tax program. This is how it started last year and continued off-and-on for four months or better. This is making Argentina look like an unreliable supplier to buyers right now, which will only help U.S. soybeans and, by default, canola as well.

“Wet Midwest and dry southern Plains conditions are possible again this spring due to a Pacific La Nina that is building,” one report reads. Some weather analysts believe we are heading into very similar conditions in the U.S. as last year due to the building La Nina conditions. Excess moisture in some regions that could delay seeding, and severe dry conditions in some of the wheat-growing regions, could certainly impact production. There is more concern about those areas that may experience the dryness, as this will be a second and/or third season for some areas and will certainly have big impacts on production if it stays dry. Let’s see what Mother Nature will do next !

According to Reuters today, quoting the Kremlin, Russia’s President Dmitry Medvedev has signed a decree endorsing the establishment of state-owned grain trader United Grain Co.

The new company is being created to raise domestic grain purchases and sales and export volumes, as well as to upgrade and build elevators and port terminals, according to the decree published Monday.

The decree, signed Friday, adds the company to a list of “strategic enterprises,” which prevents foreigners from gaining control. But it says the government should invite private companies to participate in the trader.

It also gives the government nine months to finalize the creation of United Grain, Reuters said.

Russia’s goal is to export a record 18 million tonnes of grain in the 2008-09 marketing year started in July. The government has bought nearly eight million tonnes into its stocks and targets to buy another two million.

They are now a serious player in the world grain export markets going forward! World wheat markets are going to get tougher and tougher to compete in, as Russia rebuilds and pushes to become a key world wheat exporter.

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.

COPA Medallion COPA finalist in 2012, 2014 and 2015.
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