[Farmmarketnews] Rod Krinklaw Wheat Commentary for March 16, 2011

[Farm Market News - Ontario Commodity Report]

Wednesday 16 March 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
May. 
6.17 ¾ 
↓
83 ¼   
cents

Soybeans CBOT
May.
12.89
↓
60  
cents

Wheat CBOT
May. 
6.63
↓
95 ¾  
cents

Wheat Minn.
May. 
8.06 
↓
97 ¾      
cents

Wheat Kansas
May. 
7.78 ¼ 
↓
75 ¼   
cents

 
 
 
 
 
 

Canadian $
Jun. 
1.0069
↓
           234
points

 
CORN
Corn futures traded limit down on Tuesday as concerns over the Japanese nuclear
crisis drove traders to reduce risk in a host of markets.  Markets tumbled as
concerns increased about Japan's infrastructure and economy following Friday's
earthquake and tsunami and a subsequent crisis at a nuclear plant. Worries that
Japan's demand for commodities will drop off in the near term sent buyers to the
sidelines as investors pulled cash out of risky assets in favor of more liquid
holdings such as U.S. dollars.  Japan is a large importer of corn and pork, as
well as a key consumer of soybeans, wheat and beef.
Corn futures have pulled back 12% since reaching a 32-month high on March 4 on
concerns global supplies would fall short of ongoing, strong demand. Yet worries
have been growing about a potential global economic slowdown, driven by high
energy prices and unrest in the Middle East and North Africa. The Japanese
disaster is further fueling concerns among investors.
The USDA report released on March 10 showed no changes to the US corn supply,
but did increase world ending stocks slightly.
 
SOYBEANS
 
Soybean markets were also affected by the Japan crisis and traded limit down on
Tuesday.  However the Soybean market did show more strength on Wednesday than
corn and wheat, gaining back 17 cents. 
Brazil crop estimates have been cut for the harvest in the world's
second-ranked soybean producing country by 1m tonnes to 70m-71m tonnes, citing
rains which had hit the crop at a vulnerable time. Further downgrades may be in
the offing if rainfall persists, raising a question mark over whether the
harvest will beat 2010's record of 68.5m tonnes.
The March 10 USDA report had US soybean stocks unchanged from the previous
month as world stocks increased marginally.
 
 
 
WHEAT
Japan, a steady buyer of wheat, said it is proceeding with its regular wheat
import tenders, despite the earthquake and tsunami. Yet, traders are concerned
the government may curb its purchases or be unable to take delivery of grain due
to damaged ports in the north.
The March 10 USDA report had US wheat stocks increasing to 843 million bushels,
well above the average trade guess.  Slow exports out of the US since February
are to blame for the excess wheat.  World stocks also increased due to
production increases in Australia and Argentina.
Current contract prices for March 16, 2011 at the close are as follows:
SWW at $209.38 per tonne ($5.70 /bu.), SRW at $214.83 per tonne ($5.85 /bu.),
HRW at $231.15 per tonne ($6.29 /bu.), and HRS at $276.88 per tonne ($7.54
/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 
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