[Farmmarketnews] Todd Austin Commentary

[Farm Market News - Ontario Commodity Report]

Wednesday May 4, 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
July
7.29 ½         
↓
29 ¾   
cents

Soybeans CBOT
July
13.52   
↓
32 ½   
cents

Wheat CBOT
July 
7.72    
↓
40 
cents

Wheat Minn.
July 
9.15 ¼    
↓
39 
cents

Wheat Kansas
July 
8.77 ¾    
↓
45 ¼    
cents

 
 
 
 

Canadian $
Jun. 
1.0423 
↓
77
points

 
CORN
U.S. corn planting continues to be slow. Wet weather has limited planting
progress to an anaemic 13 percent versus a five year average of nearly 40
percent. This is one of the slowest paces in decades. While the lag in planting
progress is important, it is not the ultimate defining issue for this year’s
corn crop. 
 
Despite slow plantings in the past, there have been years where the corn yields
have been respectable. On the flip side, other slow planting years resulted in a
few million less corn acres.  Ultimately, this leads to much uncertainty in the
corn market, resulting in continued market volatility. 
 
SOYBEANS
Harvesting pressure in Brazil and Argentina is adding bearish market sentiments
into the soy markets. Spot prices as well as deferred prices continue to trade
lower, on news of larger harvest expectations in South America. Strengthening in
the U.S. dollar is also contributing to a general decline in commodity values,
as it makes the commodities relatively more expensive to purchase.
 
The traditional Asian appetite for soy products plus China’s need to feed its
own expanding livestock herds are boosting Latin American soybean exports across
the Pacific. This need for soybeans is so serious that the Chinese are willing
to invest large amounts of capital to assure a consistent long-term supply. Last
month China announced a $10 billion outlay in Brazil for the production, storage
and transportation of soybeans.


WHEAT
Spring wheat planting, like corn, is progressing slowly. Only 6 percent of the
nation’s spring wheat has been planted compared with 5 percent the previous
week, 39 percent last year and 25 percent for the five-year average. USDA’s
winter wheat crop condition rating was dropped 1 percent to 35 percent good to
excellent, 25 percent fair and 40 percent poor or very poor.
 
It is estimated that 50 percent of Ontario’s winter wheat has had nitrogen
applied to it. Mother Nature has not been cooperating with us to get nitrogen on
the balance of acres. This also means that the wheat is not progressing very
quickly. On the positive side, not much wheat has been written off due to winter
kill this year. 
 
 
Current contract prices for May 4, 2011 at the close of the markets are as
follows:
SWW at $245.65 per tonne ($6.69 /bu.), SRW at $250.94 per tonne ($6.83 /bu.),
HRW at $268.56 per tonne ($7.31 /bu.), and HRS at $317.29 per tonne ($8.64
/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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