The Rural Voice, 2000-12, Page 47certain sectors.
I would suggest that producers sell
some corn into today's markets,
especially the old crop corn market.
New crop corn sales can wait for
awhile. I still feel that corn futures
will go higher to buy acres in the U.S.
and possibly go to some rather absurd
soybean -corn ratios to do it. In
Ontario, many producers are still in
shock from the low corn yields and it
may take stronger than normal basis
levels to encourage expansion in
acres.
The soybean market has been a
little topsy-turvy, with a USDA
report that lowered the 2001
carryover by 15 million bushels to
350 million. Many traders thought
that demand would have been
increased but USDA did not agree
and as a result prices fell right after
the report. Coupled with the
expectation of a huge South
American soybean crop, lower prices
are not unexpected. However, "mad
cow" is back in the news and some
European countries have banned the
use of meat or bone meals. U.S.
soymeal or raw soybeans will fill
some of that demand. Now, we are
seeing soybean futures prices climb
back towards the $5 mark. The export
inspection for U.S. soybeans have
been above USDA projections and
this latest European news should
serve to further bolster U.S. soybean
and soymeal exports.
In Ontario however, yields are
down from last year and with the low
Canadian dollar being a factor,
elevator basis levels have gone up to
about $2.20 over January futures. The
crushers will probably keep their bids
at or near import levels throughout
the coming year given the lower
yields and the large quantity of food
grade soybean being exported.
Worldwide soybean carryout was
projected to grow according to
USDA only adding to the world's
excess of oil seeds which runs
counter to world coarse grains stocks
(including corn) which have fallen
dramatically. If South America does
produce a bumper crop of soys, the
only way to slow the growing
stockpile is to have a wealthier
calamity somewhere else in the
world. Meal use in the world
continues to be strong, but
unfortunately, the supply of oils
continues to outpace demand. Having
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