[Farmmarketnews] Todd Austin Grain Commentary

[Farm Market News - Ontario Commodity Report]

Wednesday 23 February 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
Mar. 
6.91 ½ 
↑
1   
cents

Soybeans CBOT
Mar.
13.200
↓
46  
cents

Wheat CBOT
Mar. 
7.63
↓
74  
cents

Wheat Minn.
Mar. 
9.06 ¾  
↓
50 ¾      
cents

Wheat Kansas
Mar. 
8.78 ¾ 
↓
51 ¼   
cents

 
 
 
 
 
 

Canadian $
Mar. 
1.0098
↓
43 
points

 
CORN
 
Corn supplies are going to be extremely tight this year. Considering that the
U.S. harvested its third-largest crop last year, this is a demand market. 
Global economic growth is driving demand for improved diets, and rising
populations continue to boost exports.
 
With the smallest corn inventories in 37 years, farmers around the globe are
failing to produce enough grain to meet rising consumption, even as planting
expands and food prices surge. Despite a great harvest, the U.S. will just be
getting back to comfortable levels in terms of stockpile levels.
 
Recent turmoil in the Middle East and northern Africa has sent commodity prices
tumbling as funds move money out of grains and back into oil. Traders speculate
that with the escalation of violence, this region will curb its demand for
grain, or, at the very least, temporarily disrupt shipments of grain. Corn
futures have fallen 4.5 percent since the 17th of February.
 
SOYBEANS
 
For soybeans, stocks at the end of the current marketing year are expected to
be very small, but prospects remain good for a large South American harvest that
is currently under- way. Seasonal declines in U.S. exports are expected at this
time of the year, as importers switch to South American supplies.  The
cancellation of 120,000 tonne purchase of U.S. beans by the Chinese is likely to
be attributed to a switching of suppliers.
 
U.S. exporters sold 396,332 metric tonnes of soybeans from this crop year and
next harvest in the marketing week up to February 10.  This represents a 59
percent decline from a week earlier, according to data from the U.S. Department
of Agriculture.
WHEAT
After the President’s Day holiday on Monday, wheat markets opened sharply lower
on Tuesday on increased tensions in the Middle East and specifically Libya. 
This resulted in a massive non-commercial selloff leading to a limit down
trading session of 60 cents.  Fundamentally, wheat markets should have shown
some strength on Tuesday as it was announced that Egypt purchased another
quantity of US wheat.  Weather concerns around the globe should also have helped
to temper this sell off; however, this was not to be, as the market assumes that
the Middle East will stop importing until recent turmoil subsides.
 
The futures markets continued to erode into Wednesday, trying to find a level
where buyers would be interested.  Even though the crude oil markets moved
higher this week, the Canadian dollar did not move up with it as it has in the
past, due in part to the offsetting devaluation in Canadian commodities and
stocks.
 
Lower futures values across the board could allow basis levels to remain steady
or even lead to some stronger basis levels. Grain companies may provide a
pricing incentive to farmers who have just watched some very attractive prices
slip away in the last week.
 
Current contract prices for February 23, 2011 at the close are as follows:
SWW at $255.80 per tonne ($6.96 /bu.), SRW at $255.80 per tonne ($6.96 /bu.),
HRW at $270.36 per tonne ($7.36 /bu.), and HRS at $311.75 per tonne ($8.48
/bu.).
 
 
John Jordan
Editor, AgriLink and Farm Market News
University of Guelph, Ridgetown Campus
Tel. 519-674-1500 x 63577
Fax. 519-674-1530
E-mail: jjordan at ridgetownc.uoguelph.ca 
AgriLink website : www.ridgetownc.com/agrilink 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20110223/cfe4e8ca/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: Wheatcom.docx
Type: application/vnd.openxmlformats-officedocument.wordprocessingml.document
Size: 309487 bytes
Desc: not available
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20110223/cfe4e8ca/attachment-0001.bin>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: Wheatcom.pdf
Type: application/pdf
Size: 254522 bytes
Desc: not available
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20110223/cfe4e8ca/attachment-0001.pdf>
-------------- next part --------------
An embedded and charset-unspecified text was scrubbed...
Name: Wheatcom.txt
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20110223/cfe4e8ca/attachment-0001.txt>