The Rural Voice, 2001-12, Page 55Grain Markets
a crop that is much bigger than last
year's crop. With a terrible soybean
crop, more storage is available to
store corn and still there are areas
struggling to find space for the last of
the crop.
Basis levels in Ontario have been
extremely high throughout harvest
especially in western Ontario where it
was feared that the crop would be
very short. However, the local crop is
better than expected and corn
continues to come in from Michigan,
so now there is a feeling that basis
levels will finally begin to fade. If
basis does not soften, U.S. corn will
keep coming in and Ontario prices
will suffer for months down the road.
I would rather have short term pain
for long term gain.
SOYBEANS:
The USDA increased soybean
production and carryout in their
November 9 report. Soybean exports
as opposed to corn exports are strong
and if they continue at the present
pace will use up a third of this year's
production. Of more concern though
is the huge increase in the projected
South American soybean production.
A conservative guess seems to be a
10 per cent increase assuming no
weather problems, and unlike most
years there is not talk of "El Nino"
this year. So, any strength in future
prices may be short lived as the South
American crop develops.
In Ontario, we all know that the
soybean crop was a disaster. Basis
levels rose to unheard of levels to
attract soys from anywhere. The
result was a influx of U.S. soybeans
by truck, rail and vessel as the
American producer sold his soys
right off the combine. The basis in
Ontario is still strong although it has
weakened from the previous high
levels. The Ontario crushers probably
have enough soybeans booked to
cover their needs well into next
spring.
We are hearing that because of the
problems with the 2001 soybean crop
as well as new crop prices compared
to corn, producers will likely increase
corn acreage substantially. If soybean
acreage is down, expect new crop
basis levels to be relatively strong.
It has always been said that when
basis levels are strong, producers
should sell and when basis levels are
weak, they should avoid selling.
Basis levels for both corn and
soybeans are extremely strong and
have been since harvest began. One
thing we can expect to see is a steady
flow of grain into Ontario as long as
our basis stays strong. I feel very
strongly that corn basis will gradually
weaken if producers sell and end
users have their needs met. We have
already seen processor bids begin to
fall back and there will be a point
when the large users will not need
any more corn.
Soybean basis is also very strong,
but will likely hold at import levels
because of the extremely poor
Ontario crop. Since there are only
two soybean processors in Ontario,
the likelihood of overbuying soys
from the U.S. is remote unlike the
situation with corn where many
importers supply many users.
Future prices for both corn and
soybeans may have some more
upside potential, but unless there is a
crop disaster somewhere in the world,
strength will be limited. North
America and world supplies of most
grains are ample and South America
is planting 10 to 12 per cent more
soybeans than last year, so supplies
will not likely dwindle.
Producers will have opportunities
to forward sell 2002 production and
given the likelihood of an increase in
Ontario corn acres, it might be
advisable to at least get some corn
sold. On the other hand, soybean
prices aren't too attractive relative to
corn, but producers need to keep a
close eye on markets if they are
planting soys. If an opportunity to
lock in a profit appears, take
advantage of it. As far as old crop is
concerned, don't wait too long to do
some selling.0
Information supplied by Dave Gordon,
LAC, Inc., Hyde Park, 519-473-9333.
B.J.
BEAR
GRAIN CO. LTD.
WET BREWERS
GRAIN
can help your
feeding
program by:
• providing high quality rumen
by-pass protein
• improving palatability of roughage diets
• extending roughage supply
• replace high cost
supplements
Also available
HOMINY, GLUTEN,
SCREENINGS,
BAKERY MEAL
and other single
ingredient feeds.
B.J. BEAR
GRAIN CO. LTD.
25 Industrial Dr. Unit 7-B
Elmira, ON N3B 3K3
(519) 669-1750
Happy
Holidays
to you
and yours
LESLIE HAWKEN
A SON
Custom Manufacturing
LIVESTOCK & FARM EQUIPMENT
• Big Bale Racks
• Cattle Panels
• Headgates & Chutes
• Portable Loading Chutes
• Gate -Mounted Grain Feeders
• Feed Panels
• Self Locking Feed Mangers
Round Bale Feeder
Scaaaa'a ga_cdtwlld is aux
cueianaus mid (.ienda.
a 9luy :Atasxy eAslaensaa a all.
3sarx ;ie., 10ycr,
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For the best quality and service - Cal!
Jim Hawken
RR #3 Markdale 519-986-2507
DECEMBER 2001 51