The Rural Voice, 2001-07, Page 44Little new news to
drive grain markets
By Dave Gordon
The last month has been one of
slow, dull trade in all grains and
oilseeds. Yes, there was a little flurry
of activity in soybeans a couple of
weeks ago but it didn't last long. There
has been some focus on the weather in
China which has been hot and dry but
weather conditions half way around the
world almost seems like an intangible.
It isn't affecting our markets like hot,
dry weather in the midwest corn belt
would.
The USDA issued a supply/demand
report on June 12 that increased corn
and wheat stocks and reduced soybean
Grain Markets
stocks. With no dry weather in the U.S.
to talk about futures prices ptit in
another leg down with corn making
contract lows.
CORN
Corn export sales have picked up
slightly with lower cash prices but we
won't see these sales filled until the
new crop year. Recently, a U.S.
academic studied the USDA's
projection for exports over the last 20
years. In virtually every year. actual
shipments did not meet projections and
2000/01 falls in this category. It's
domestic usage in the U.S. that has
kept corn moving over the last year' and
the focus in the future will be in
ethanol production as the U.S.
purchases for clean air.
However, dealing with the present,
unless the weather turns 180 degrees
around to hot and dry, there is really
nothing to move markets higher. As
exports continue to be reduced and the
carry-over gets larger, less corn
production is needed to cover projected
usage for the coming year. Next week
(June 29) the USDA will issue a
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40 THE RURAL VOICE
quarterly stocks report and planted
acreage report. It is believed by many
who planted corn acres will come up
short of the USDA planting intentions
report by about one million acres. By
the time you read this, we will have an
answer. There should not be any major
surprises in the stocks report.
In Ontario, nothing has changed.
Corn keeps coming in while local
producers continue to hold. This isn't a
good situation and those with corn still
in storage need to take a hard look at
their options which are becoming
fewer. It is only three months to
harvest 2001 and time is of the
essence. Old crop basis levels are quite
strong at $.90 over July futures which
will probably switch to $.80 over
September futures. However, new crop
basis has already dropped to $.65 over
December which is still a little on the
high side in U.S. funds considering the
crop condition in Ontario.
SOYBEANS
Soybean prices looked strong earlier
in the month but have dropped off in
recent days. However, the USDA
reports out next week may re -spark the
fire. It is widely thought that soybean
stocks are much lower in the U.S. than
once thought. Crush and exports have
been ,much better than previously
predicted and the USDA may be
adjusting crops from previous years.
We've also heard of wet weather
causing delays in planting in some
parts of the upper Midwest but, soys
will get planted right up until July 1.
The more important factor affecting
prices will be demand both domestic
usage and exports.
In Ontario, the soybean crop is in
the ground and in good condition but
smaller than last year. Right now
though, producers need to get their old
crop soys marketed by the end of
August. Basis levels are very good
because of a high crush rate in Ontario
but with the Canadian dollar showing
some strength, don't count on basis
going higher. Producers might consider
selling a basis contract and leave the
futures pricing to see if the market goes
higher but, only for the short term.
New crop basis should remain
relatively strong given the smaller
Ontario crop. We should see the
Ontario market go to import values
quicklJC after harvest as there likely