Monday was a negative day for our markets. Spot corn closed down 2 1/4, spot soybeans closed down 6, spot winter wheat closed down 7 and spot spring wheat closed down 5 1/4. In the overnight trade corn, soybeans and winter wheat are now positive with spring wheat still on the negative side. Oil closed up $1.27 yesterday at $60.63 per barrel. It is stronger in trading again this morning with it now valued at $60.72 per barrel. Our dollar started out yesterday morning at $0.731 US and then trended lower going down to $0.728 US in the overnight trading. It has bounced back a bit this morning with it currently valued at $0.729 US.
Yesterday we talked about how the current winter storm in the US might have an effect on the winter wheat market. Most analysts talked about how this could bring some support to the market. Unfortunately with the fairly widespread snow fall that came with the storm threats of winter kill in the wheat growing regions were dismissed. As such prices actually fell yesterday instead of rising. The small rally going into the storm at the end of last week was abruptly stopped.
Reports out of Brazil have their soybean harvest going well. The Mato Grosso region (Brazil’s largest soybean growing area) is reported at 14% harvested as of last Thursday. This is about 10% ahead of last year’s harvesting pace. With another record crop coming out of Brazil and prices currently near $1 per bushel less expensive than US soybeans it is easy to predict that Brazil soybeans will dominate in the world market going forward. Unless China surprises the market and continues to purchase overpriced US soybeans (for political reasons) it is hard to see the price on the CBOT rallying or even being supported at current levels.
When I sit back and look at forward prices for both the corn and soybean markets I can easily see why farmers are reluctant sellers. With what is looking like ever increasing input prices it is only natural to be looking for much higher prices. Harvest corn at $300 and soybeans at $600 would be great. However, these numbers are currently not available and without some major weather problems this year in the US we most likely will not see them. Current prices with a strong crop would help most farmers balance the cash flow for the coming year. Work out your cost of production (with the worksheet on our website) and take some action on pricing. I am never looking for farmers to book a large percentage of their next year’s production at this time of the year but get something done. Get in the market. Take some risk of the table and set some realistic target prices for more production. Give us a call anytime to discuss how these simple steps can assist you with your own farms marketing strategy.
Delores Seiter | 613-880-7458
Bob Orr | 613-720-1271
Tony Mitchell | 613-227-2525
Office | 613-489-0956
