[Farmmarketnews] Todd Austin Grain Commentary for Wednesday, February 1, 2012

[Farm Market News - Ontario Commodity Report]

Wednesday February 1, 2011

Commodity
Period
Price  
Weekly Movement - Friday to Wednesday 

 
 
 
 
 
 

Corn CBOT
Mar
6.42 
↑ 
3 ½  
cents

Soybeans CBOT
Jan
12.15 ¼  
↓ 
2 ½  
cents

Wheat CBOT
Mar
6.74 ¼  
↑ 
24 
cents

Wheat Minn.
Mar
8.36 ¾  
↑ 
8 
cents

Wheat Kansas
Mar
7.22 ½  
↑ 
 25 ½ 
cents

 
 
 
 
 
 

Canadian $
Mar
1.0001 
↑ 
22 
points

 
Commodities have strengthened by encouragement that the European debt crisis
would be reined in, as European leaders backed a plan that will hopefully tackle
the underlying causes.
CORN
While weather conditions have improved in Argentina, the market looks to be
finding support from yield loss indications, due to drought conditions earlier
in the growing season. Argentina’s agriculture ministry had recently lowered its
estimate of corn production to 23 million metric tonnes (mmt), compared to its
preliminary estimate of 30 mmt and the USDA’s recent estimate of 26 mmt.
Ukraine’s grain exports fell 27% in January due to cold weather and
insufficient railway carriers. Corn had accounted for 1.3 million tonnes, a
decrease of 35% from the previous month. Since the beginning of the marketing
year (July 1st) corn exports have reached 6.2 million tonnes.
SOYBEANS
The weather pattern in Argentina’s main crop belt appears to be turning
favourably, just as the soybean crop heads into its key growing period. The
timely rain events should help prevent further yield losses, and may reduce
South American crop concerns. Recently, Argentina’s agricultural ministry
lowered its soybean production to 48.9 million metric tonnes, from their
preliminary estimate of 53 mmt.  The USDA recently estimated production at 50.5
mmt.
The soybean markets can be characterized by slightly weaker demand, more
abundant supplies and somewhat weaker price prospects than in mid-2011, says
Darrel Good, University of Illinois agricultural economist. A potential boost
for soybean demand and profits in 2012 is the increase in soybean oil targeted
for biodiesel under government Renewable Fuels Standard mandates, though
increased U.S. soybean exports will still hinge on South America production and
global demand.
 
WHEAT
Wheat futures have rallied due to weakness in the U.S. dollar, spillover
support from corn and concern over winterkill in parts of Europe where there is
not adequate snow cover. There is also talk that Russia may soon put
restrictions on grain exports.
U.S. winter wheat conditions are more favourable. Frequent rains especially in
the eastern hard red winter wheat belt has replenished soil moisture levels and
have allowed crop conditions to improve significantly of the 2011 levels.
 
Contract prices for February 1, 2012 at close, are as follows:
SWW at $243.40 per tonne ($6.62 /bu.), HRW at $274.63 per tonne ($7.47 /bu.),
HRS at $290.89 per tonne ($7.92 /bu.), and SRW at $250.75 per tonne ($6.82
/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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