Grain Market Commentary for September 6, 2017

Commodity Period Price Weekly Movement
Corn CBOT December 3.61  16 cents
Soybeans CBOT November 9.71  40 cents
Wheat CBOT December 4.46  17 cents
Wheat Minn. December 6.44  12 cents
Wheat Kansas December 4.49  20 cents
Chicago Oats December 2.34  09 cents
Canadian $ December 0.8180  2.55 points

Corn

Well we seem to have bounced off the $3.45 level on the December Chicago futures. The charts suggest we could see a little more upside on the futures. Our first resistance level is at the $3.70 level on December. Although the short term indicators were oversold and the tempo is up for the very short term, we are still in a bear market and any descent rallies should be used to lock in a portion of your profits. The red sell signal from August 25 is still intact and should be viewed as a reminder that we are still in a downtrend. Weakness in the U.S. dollar is starting to have a noticeable effect on export competitiveness.

Initial support on the December futures has been pegged at $3.45 for the time being and the primary trend is still down. Short term indicators have turned positive, but weekly and monthly indicators are still negative.

Soybeans

Our important $9.30 support level did us proud once again. We had a nice pop in prices this week in the November new crop futures. With increased imports from China and minor weather concerns, the November contract soybeans managed a 40 cent rally since our last commentary and we could still see some excitement. Our red sell signal from August 3 is still intact, but another 20 cents upside and the signal will be negated and become neutral. Initial support is at $9.20 with overhead resistance at $9.75 – $10 on the November contract. The extent of damage to corn and soybean crops caused by Hurricane Irma, if any, is not fully known.

Short term indicators are negative and the primary trend is still down.

Wheat

Like the other grains, we managed a small rally in wheat. With little fresh news to prompt a large scale rally, we are dependent on weakness in the U.S. dollar to entice export sales. Support sits at $3.60 on the long term chart based on the lead month Chicago contract, while overhead resistance is viewed at $4.60.

All indicators are still negative and the primary trend is still down.

Harvest 2017 prices as of the close, September 6 are as follows:
SWW @ $184.54/MT ($5.02/bu), HRW @ $186.79/MT ($5.08/bu),
HRS @ $240.00/MT ($6.53/bu), SRW @ $184.54/MT ($5.08/bu).

Proposed tax changes impede growth in grain farming sector

Press release

GUELPH, ON (September 1, 2017) – Ontario’s grain farmers are highly concerned about the proposed tax changes to private corporations.

While the government’s concerns appear to be focused on professional corporations, the proposed legislation encompasses all small business corporations, including family farm corporations. The impact of these changes would impede growth in the agricultural sector – an industry identified by the Advisory Council on Economic Growth (Dominic Barton) as a key sector for Canada to invest in and grow.

Watch now: Mark Brock, chair of Grain Farmers of Ontario, joins BNN to discuss why Finance Minister Bill Morneau's proposed tax changes will make bringing the next generation of farmers into the business a lot harder. Video on BNN.ca.

“One of the key concerns among our farmers is how the proposed changes will impact farm transfers to the next generation,” says Mark Brock, Chair of Grain Farmers of Ontario. “The changes would add complexity and uncertainty to the transfer process, particularly for young farmers, under 24 years of age, who are trying to establish themselves in the farm business.”

The time frame for implementation of these changes poses significant challenges for farms that are currently in the process of transferring farm businesses. For these farmers, critical decisions and business transformations will need to be completed before the end of this year in order to access the proposed one-time capital gains exemption in 2018.

“These tax changes will not only result in higher compliance costs but will also reduce the cash flow and cash reserves that farmers use to purchase new, innovative technology and to mitigate against future risk,” says Brock. “Investing in the family farm is essential for agricultural progress.”

Grain Farmers of Ontario has joined the Coalition for Small Business Tax Fairness and requests that the government take the time to work with industry to address any shortcomings in the tax policy affecting private corporations and consider the implications to agriculture and farmers before implementing the largest tax changes in 30 years.

Grain Farmers of Ontario

Grain Farmers of Ontario is the province’s largest commodity organization, representing Ontario’s 28,000 barley, corn, oat, soybean and wheat farmers. The crops they grow cover 6 million acres of farm land across the province, generate over $2.5 billion in farm gate receipts, result in over $9 billion in economic output and are responsible for over 40,000 jobs in the province.

Contact:

Mark Brock, Chair – 519-274-3297; cropper01@hotmail.com

Meghan Burke, Communications – 519 767-2773; mburke@gfo.ca