[Farmmarketnews] GFO's Ahmed Chilmeran Grain Commentary

Wed Sep 21 16:05:35 EDT 2011

Wednesday September 21, 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
Dec.
6.858
↓
38.50
cents

Soybeans CBOT
Nov.
13.205
↓
62.25
cents

Wheat CBOT
Dec. 
6.668
↓
37.75
cents

Wheat Minn.
Dec.
8.400
↓
24.75
cents

Wheat Kansas
Dec.
7.605
↓
42.00
cents

Canadian $
Dec. 
0.998
↓
103.00
points

According to the IMF report on Tuesday, the world economy has entered a
"dangerous new phase," As a result; the international lending organization has
sharply downgraded its economic outlook for the US, the euro zone, and Canada.
Canada’s 2011 growth forecast of 2.8% back in April has been slashed to 2.1%,
while that of the US is now sitting at 1.5% down from 2.5%. Troubles in the euro
zone continue with S&P downgrading Italy’s credit ratings and Greece rushing to
solve its woes with creditors through privatisations of government agencies.
Emerging economies like China, India, MENA, and South America have also suffered
forecast cuts, but will remain the driving force behind global growth in 2011.
Recent publication by Statistics Canada concluded that while trade flows have
bounced back in other countries since 2009, Canada is an exception having only
recouped half of it pre-recession export levels.
CORN
Corn market has been in a bullish trend due to the less-than-ideal growing
conditions with concerns of yields not meeting demand. U.S. corn futures are
expected to remain high in the near foreseeable future due to demand
expectations, outside market support and farmers' reluctance to sell. Chicago
December corn rose 0.5% to $6.94-1/4 a bushel up from six-week low that hit
earlier this week. Expectations that China set to import more corn is helping
support the current market trend.
SOYBEANS
Soy futures ticked higher on Wednesday with November soybeans rising 0.2% to
$13.41-3/4 a bushel as markets turned their attention to the conclusion of a
two-day U.S. Federal Reserve policy meeting. Concerns over South American
weather have also been of help. The North American freeze last week appears to
have done more damage to soybeans in some areas than initially thought.
Minnesota, the third ranked soybean growing state suffered a particular
downgradeof 10 points to 51% in terms of the proportion of the crop rated in
"good" or "excellent" health. Rating of the crop in North Dakota tumbled by nine
points to 60%, while that in Wisconsin fell by four points to 75%.In Canada, the
frost had significant impact as well with temperatures as low as minus 8 degrees
Celsius in Saskatchewan.

 WHEAT
Wheat futures are rebounding from a six-week low as adverse weather conditions
in the U.S. threatened to further delay planting of winter-wheat crops.Wheat is
also being supported as high corn prices are encouraging end-users to use more
wheat in animal feed. Chicago December wheat rose 0.2% to $6.76-1/2 a bushel.
According to The USDA weekly crop progress report, approximately 14% of the U.S.
winter-wheat crop was planted compared to 19% in the same week a year earlier
and below the five-year average of 20%. Kansas, the second largest U.S.
winter-wheat growing state has nearly 8% of the crop planted, compared to the
five-year average of 10% for this time of year. Egypt, the world’s biggest wheat
buyer, plans to boost imports this year to build domestic stockpiles and prevent
future political unrests fuelled by high food prices. This in turn may limit
futures from slipping further this year.

Harvest contract prices for September 21, 2011 at the close of the market, are
as follows:
SWW at $227.75 per tonne ($6.20 /bu.), SRW at $227.75 per tonne ($6.20 /bu.),
HRW at $259.14 per tonne ($7.05 /bu.), and HRS at $306.68 per tonne ($8.35
/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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