Collapsing U.S. Dollar . . .
Buyers Desperate for Malt Barley . . .
Crude Oil Booms Again
Disappointing Bank of America quarterly results yanked the U.S. dollar into fresh contract lows. Bank of America shares fell nearly 3 ½% today. But with the U.S. buck in-collapse, crude oil sprinted higher and U.S. grains received a bullish nudge. “It was all about the collapse of the U.S. dollar. It triggered a domino affect across stock and commodity markets” commented a New York analyst. Soyoil stormed 1 cent / lb higher mid-day, soybeans romped nearly 20 cents/bu higher. Canola gained $3 to $4 / MT fueled by U.S. soy complex gains. Corn also rammed nearly 10 cents/bu higher . . . “Corn is already in a fight-for-acres” commented a Chicago trader. “There is a fear that increased soybeans plantings will cut into American corn production next fall”. But Western Barley has little life . . . Cheaper corn is now flooding into Western Canadian cattle rations. “Feedlots aren’t buying barley. It’s simply too expensive to make cattle pencil” commented a Brandon feeder. And live cattle turned higher . . . Optimism that U.S. cash cattle may trade higher at $94 to $95/cwt this week triggered buying. December live cattle tested a high of $97.75/cwt. In tomorrow’s Cattle On Feed report, traders expect on feed numbers at 95.9%. Average trader guess for September placements is 106.6%. The average guess for September marketings is 96% of a year ago
Cash Market Snapshot
Cdn $ Spot 102.73 +.28
Dec $102.75 +.28
Mar $102.77 +.28
Canadian Grain Overview: Feed Barley . . . Western Canadian feedlots are now actively railing U.S. corn into rations displacing high-priced barley. As a result, barley demand has slumped faster than Calgary Flame wins with many lots booked at least one (1) month forward. Bottomline . . . feed barley bids have likely seen their high for the entire crop year. After racing to nearly $5/bu for early 2008 delivery. Southern Alberta 48lb delivered bids may stabilize in a $4 to $4.25/bu range heading into 2008.
Canola . . . Hot crude oil prices have held canola up by-its-suspenders. Technically, our canola market is overbought. Fundamentally, our export market will suffer over the amazing rally of the Canadian $. Once crude prices fall back, canola bids may slump $15 to $20/MT (35 - 45 cents/bu).
Edible Peas . . . More of the same expected. #2 yellow pea delivered bids continue to range $6.25 to $7/bu depending on farm location and time of delivery. Enormous ocean freight rates and loonie strength has derailed further pea market gains despite the overall commodity price boom.
Milling Wheat . . . Highs are in, now where is the bottom? Long-term, Chicago wheat futures may eventually slip toward $7/bu, but this road will be choppy. Board PROs next week are expected to be steady to slightly lower, with the exception of durum. Board fixed wheat prices have now dropped about 70 cents/bu through October.
Durum . . . Durum prices are expected to remain red-hot. U.S. durum prices have been heard as high as $17/bu fob west coast port.
Malt Barley . . . Buyers have reduced their standards in an effort to source malt barley. Contract guarantees of minimum $5.20/bu delivered for two-row malt have been heard. Board PROs should be higher, but the pool appears to be diluted by earlier lower-priced sales.
2CW Oats . . . The ugly stepsister in this bull grain market. Big Canadian supplies and the powerful loonie have made Manitoba Cheerio trains headed into Minneapolis a lot less profitable for growers. 40lb oat bids are expected to remain flat into the Xmas market.
Steady Cattle Bids: At least Canadian fed cattle bids have slowed their descent. Alberta fat cattle bids have held steady this week ranging 78 ½ to 79 ½ cents/lb. Fewer cattle on offer (feedlots becoming more current) may finally slow the price decline. Cattle feeders note . . . fed cattle bids should begin to recover modestly within the month.
Errol
WCE Futures Prices: Canola, Wheat and Barley
WCE Options: Canola,
Wheat, and
Barley.
CBOT Futures Prices: Corn, Soybeans, Wheat, Oats
CME Futures Prices: Cattle, Hogs, etc.
Intraday Stocks & Indexes:
TSX 300 14,328 +108
Dow Jones 13,888 -04
U.S. $ 77.58 -.44
Energies & Metals:
Gold Dec 768.70 +6.40
Nat Gas Nov 7.38 -.07
Crude Oil Nov 89.47 +2.07
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