The Rural Voice, 1986-10, Page 24Earn High Returns with
Short Term Investments
• Financial Planning
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Investments
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STEPHEN M. DONEY
Financial Adviser representing
National Financial Brokerage Centre
Dungannon 519-529-3126
McDermid
Farms Ltd.
Purebred & Crossbred
Landrace, Duroc,
Yorkshire & Chester White
Boars & Gilts
r)ntario Swine Herd Health Program
Class. Excellent * * *
Gov't ROP Tested
R.R. 4, Stayner
705-428-2353
We sell herd builders
R
1011!*
HAMPSHIRES
Purebred R.O.P.
Breeding Stock
A limited number of
Spots, Yorks, and Crossbred
Boars and Gilts
Herd health classified
good**
Delivery available
RALPH HENDERSON
R.R. 1, Atwood, Ont.
(519) 356-2656
22 THE RURAL VOICE
COMMODITY WATCH
Prices as of the market close,
September 16, 1986
Com - More of the same as corn
prices continue to drift lower.
Poor export interest and prospects
of an early harvest seem to be
dominant features in the market.
The USDA Crop Production
Report released September 11 in-
dicated a production estimate of
8.268 -billion bushels, slightly
lower than average trade estimates
but not low enough to create any
change in the trend of this market.
Negative fundamentals include:
• predicted record yields, large
carryover,
• stabilizing Soviet grain -crop
estimates,
• lack of export interest,
• generic PIK certificates
available for sale,
• diminished frost prospects as a
warming trend is forecasted,
• up to 6 -million bushels of off -
grade corn that might soon
come to market.
**HEDGERS** must be won-
dering how much lower corn prices
can go. September futures recently
hit 1493/4; this might be seen as an
initial objective for the December
contract. Producers contemplating
storing corn might consider either
the purchase of July CALL OP-
TIONS or CORN FUTURES in
lieu of storing corn.
Beans - Soys traded steady over
the month with the November con-
tract closing at 4.753/4 on
September 16 for a gain of 4 cents
since last month. Speculation
about an increase in the loan rate
was dampened when the USDA
announced the "official" loan rate
to be $4.77. Farm selling was evi-
dent as the harvest began in
southern Illinois. Senator Doles'
push for a marketing loan seemed
to be getting little attention as
Washington continues to tighten
the purse strings wherever possi-
ble.
The USDA Production Report
released September 11 estimated
production at 1.980 -billion bushels
for beans. This figure was in line
with estimates. Negative funda-
mentals abound in this market,
and the prospect of a marketing
loan program, depending on the
terms of the program, might have
a further depressing influence on
prices.
**HEDGERS** considering
storing beans might consider either
buying CALL OPTIONS or buy-
ing FUTURES CONTRACTS in
lieu of storing grain. More ad-
vanced marketers might consider a
"synthetic hedge," selling futures
and writing PUT OPTIONS
against the hedge.
Live Cattle - Livestock markets
continue to move ahead, with the
hog/pork complex seeming to lead
the way. October cattle closed at
61.62 on September 16, a gain of
2.12 over the course of the last
month. The Monthly Cattle on
Feed Report released September 15
revealed the following informa-
tion:
Cattle on feed up 4%
Placements up 20%
Marketings down 2%
The general reaction on the floor
was negative as traders expressed
concern over the large placement
figures. Trading action the day
after the report was released was
positive: after a weak opening the
market advanced and finished
higher on the day. Some analysts
are pointing out that the large
premium that currently exists be-
tween feeder and slaughter cattle,
while creating a brighter outlook
for the western rancher, should
raise caution flags for the cattle
feeder.
**HEDGERS** would do well
to remember that livestock prices
tend to trade in cycles and that
these cycles are to some extent
linked to grain prices. The recent
Cattle on Feed report tells us that
herd buildup seems to be starting.
Cattle feeders not willing to pay
feeder prices might be better off
"lightening up" in the barn and