The Rural Voice, 2002-12, Page 54Grain Markets
Bears drive corn down, bulls boost beans
Dave Gordon
is a
commodities
specialist
with LAC, .
Inc., Hyde
Park, 519-
473-9333.
By Dave Gordon
November 20, 2002
There is never a lack of opinion on
any market whether it's grain or
stocks. It is a divergence of opinion
that makes prices move and lately the
bears have taken coarse grain prices
lower while the bulls have at least
kept oilseed prices stable.
The much anticipated USDA
report of November provided few
surprises in the U.S. but China did
have some surprising numbers.
Chinese wheat stocks rose by 42
million tonnes while corn stocks were
increased by five million tonnes.
These increases may cap any gains in
wheat and corn prices until the new
year. Oilseeds are a totally different
story with substantial soybean export
sales taking place on any dip in
prices. And the major buyer is often
China.
CORN
The U.S. corn production was
increased only slightly to 9.003
billion bushels but usage was
dropped by 50 million bushels
because of slow export sales. The
USDA usually predicts export
numbers that are too high and
gradually lowers them during the
year and this year is no different. The
only bright spot for the U.S. is the
unusual interest shown recently by
Australia and Brazil for corn.
Australia is in a drought situation and
is looking to buy corn and sorghum
to the tune of 300-500,000 metric
tonnes.
Basis levels in the U.S. are
extremely strong for the time of year
and is all due to a lack of producer
selling.
And in Ontario, corn basis is also
very strong given the fact that we will
need to import corn in the coming
year. But before we start to think that
local basis should strengthen, look at
the U.S. export sales for the week of
November 10 and we see that Canada
was the second largest buyer of U.S.
corn for the week. And it also appears
that the Ontario crop is bigger than
originally thought with some
outstanding yields north of London
and east through Toronto, so there
should be plenty of corn in the
province to cover processors' needs
into next spring.
Basis levels currently sit at $1.40
to $1.50 over March futures and there
certainly isn't enough carry in the
market to pay for storage and interest.
SOYBEANS
The USDA increased soybean
production by 36 million bushels, but
only increased the carryover stocks
CropAdvisory.COLI
Mervyn Erb
CPCC-I, CCA, CAC
Brucefield, Ont.
519-233-7100
Andy Megens
PAg, CCA
St. Marys, Ont.
519-284-3199
Merry Christmas
And the happiest of holidays
to you and yours. We greatly
appreciate having good friends
and customers like you.
Garth Wilson, PAg
Research Scientist
Tavistock, Ont.
905-570-1177
Michael Hunter, CCA
Susan Schurter
GIS Specialist
Ripley, Ont.
519-395-0254
PRODUCTION MANAGEMENT CROP ADVISORY SERVICES
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