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March 13 — Markets were lacklustre today with no real leaders to pull the others along, so as the day went on, they drifted lower. Financial markets were up only marginally, with the Dow Jones up 54 points today. The positive here is that the Dow did rebound a solid seven per cent over last week. Let’s hope this can hold and continue to improve.
The U.S. dollar was down slightly today. The Canadian dollar was up 0.26 cents to close at US78.47 cents.
Crude oil fell 78 cents per barrel to close at US$46.25.
Corn was down two to four cents per bushel, beans were down five to 18 cents a bushel and wheat was down four to nine cents a bushel.
Canola finished down $3 to $5 per tonne and barley finished down $1.20 to $1.40 per tonne for the day.
We’ve seen some strong rebound in the financial markets, which is what’s needed to help pull the grains up, but grains did not follow the financial rebound as much as was hoped.
The U.S. Department of Agriculture’s stocks reports continue to show large supplies in the U.S., as we do in Canada, and with spring right around the corner, buyers are not concerned that supplies will change much. Add to that little to no speculative activity in the grains markets, and you have a steady downward trend remaining in place for a while yet.
Reports out of the U.S. say fertilizer dealers are concerned there may be logistical issues this spring when it comes to getting fertilizer to farmers, as a lot of producers have not committed to their spring fertilizer needs and the industry just won’t be able to move those kinds of volumes in a timely manner at seeding time.
A report quoting Viterra management is saying pretty much the same thing for Western Canada for this spring and it is encouraging producers to make their purchases and take them home before spring if they want to be sure to get their fertilizer when they need it.
Retailers have been sitting on high-priced fertilizer since last fall and have been reluctant to drop prices as low as some feel they should be, as they are not prepared to take a loss on the product and farmers are not willing to buy until prices drop further.
So it’s a cat-and-mouse game, but time may be running out as we are only weeks away from seeding starting. Decisions are going to have to be made soon that could have some real implications this spring if supplies or delivery are not available.
Enjoy the warm weather. That’s all for this week. — 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.