The Rural Voice, 1986-06, Page 52negative to the increase in
placements, as most traders were
looking for a drop in placements.
Open interest in the cattle complex
has been building since Chernobyl,
and if the strength begins to wane
significantly, there is the potential
for heavy long liquidation.
**HEDGERS** may consider:
1) hedging Canadian dollars by
purchasing CALL OPTIONS
2) purchasing corn and bean
CALL OPTIONS to hedge feed
costs
3) watch the $55.00 area on June
cattle for a break below this
level. Technically this would be
negative.
LIVE HOGS — Reaction to the
Chernobyl accident pushed futures
sharply higher, as several pork im-
porting nations reacted with bans
on meat products from the ef-
fected areas. June Hogs closed Fri-
day, May 16 at 47.47, a gain of
5.05 from levels of a month ago.
Projections for lighter slaughter
numbers over the next few weeks
seems to be lending a firm tone to
the hog market. Storage interests
for hams and bellies is expected to
continue to be good, and
speculators have started buying
hams and bellies in anticipation of
higher prices this summer.
**HEDGERS** might consider
some PUT OPTIONS on summer
prices to lock in these levels with
minimal risk. Corn CALL OP-
TIONS would lock in feed costs at
historically low levels. Canadian
dollar CALL OPTIONS would
help hedge basis levels.
JUST A WORD ABOUT ...
SOME LIVESTOCK IDEAS
Cattle producers might think
about the following ideas:
• purchase October 52.00 CALL
OPTIONS on cattle to protect
replacement cattle costs in the
fall. Currently trading at
around $2.75/contract
($1100.00 U.S.)
• purchase September or
December 2.10 CALL OP-
TIONS to lock in feed costs.
Currently trading at 10
cents/contract ($500.00 US). If
grain prices go lower, risk is
limited to purchase price. Hog
producers might consider the
following:
• purchase PUT OPTIONS on
July and August hogs to protect
selling prices. July $48.00 puts
closed at $1.70 ($510.00
US/contract) and August
$46.00 puts closed at $2.50
($750.00 US/contract)
• Feed hedges as mentioned
above may also be in order.
ALL LIVESTOCK PRO-
DUCERS May consider purchas-
ing CALL OPTIONS on Canadian
dollars to protect against weaken-
ing basis levels.
The information contained
herein is believed accurate,
however, Bache Securities Inc.
assumes no responsibility for its
use. For specific recommendations
and suggestions regarding stop
orders please contact your nearest
Bache office.
SOYBEAN GROWERS
There is more to seed quality than
just germination.
Rick Upfold, U of G
Crop Specialist,
explains:
"Even though farmers are
using varieties that score well in
germination tests, they can still
get a poor yield.
But seed with
vigour can re-
duce problems
associated with
soil crusting, be-
cause the seed
is better able to
break through
the crust.
"Unfortunately, testing for seed
vigour is not a common practice,
and farmers have no easy and
reliable method of testing for
it on the farm."
FIRST LINE offers
SEEDLING VIGOUR that
may make all the difference
to your 1986 yield.
• HODGSON 2900 H.U.
• EVANS 2700 H.U.
• MAPLE ARROW 2550 H.U.
All Vigour Plus First Line
soybean seed is tested
and approved for vigour.
To reduce the risk of
environmental stress
problems, be sure you
get VIGOUR PLUS
SOYBEAN SEED
Contact Peter Rowntree at
Hill & Hill Farms Ltd.
VARNA 482-3218
JUNE 1986 51