The Rural Voice, 1990-06, Page 20A NEW CONCEPT
FOR
HANDLING
BALES
two 51 /2"
augers provide
positive gentle
lift
eliminates
troublesome
chains
space saving
vertical
positioning
reverse for
loading out of
mow
low
maintenance —
durable Delron
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all drives
and controls
conveniently
at ground level
AUG -A -BALE
also:
Mow systems —
installation available
RUBOB
MANUFACTURING
R. R. 3, Arthur, Ont.
519-848-3700
519-848-2884
16 THE RURAL VOICE
GRAIN MARKETS
May 18, 1990 —The past 60 days have really
shown a great deal of strength in the corn
and soybean futures but, as always, any move
in the market needs continuous news to feed
it and we've run out of new news to keep the
market moving higher. It now appears that
the markets will be quite volatile until
the crops are planted and the size of crop
guaranteed.
CORN
Both old and new crop futures
have advanced quite strongly in the
past month, with July futures topping
out twice around $2.93. December
futures had a high of $2.82 this week,
which was a contract high.
With crop planting behind the
average for this time of year, I have to
wonder if the U.S. can produce an 8 -
billion bushel crop. Because of this,
the new crop contract will be volatile
but will likely show strength until the
crop is "made."
However, old crop corn futures
appear to have topped out and the
$2.93 point will likely provide tough
resistance when the July futures start
to move up again.
The basis levels in Ontario have
strengthened again over the past 60
days, with old crop elevator prices sit-
ting in a range of 45 to 55 cents over
July and new crop elevator prices at
30 to 35 cents over December futures.
Producers have done a fairly good
job of holding corn off the market this
month and, with steady usage, the re-
sult has been seen in basis strength.
I feel that basis in June could soften
when, and if, producers offer corn in
the market to pay crop input bills.
July and August, however, should
bring more basis strength, as the re-
maining corn will be held in strong
hands.
Many producers have asked at
what level U.S. corn can be priced into
the Ontario feed market. The answer
is that, basically, U.S. and Ontario
corn are of equal value except for the
duty and countervail duty of 50 cents
per bushel. Theoretically, the Ontario
basis could rise by the 50 cents if the
Ontario supplies are not large enough
to supply the Ontario market. How-
ever, small amounts of U.S. corn are
being imported by some industrial
users after using Ontario corn exclu-
sively since October 1989, and at this
point, with all factors considered, it
would appear that stocks are large
enough to carry us through the year.
The last USDA report reduced the
projected ending stock in 1991 by 63
million bu. from 1990. These figures
anticipate a crop size of 8.1 billion bu.
as well as increased domestic usage
over 1990. It will be important to
keep an eye on crop development in
the U.S. this summer and to relate the
crop condition and projections to the
8.1 billion bu. premise.
SOYBEANS
The USDA supply -demand report
for soybeans was very conservative in
that production for 1990 was left vir-
tually unchanged from 1989 and usage
doesn't match even production, let
alone the carryover supplies from last
year. These figures could slow any
strong move by soybeans this year,
along with the sufficient supply of
other oils and proteins. The feed grain
stocks in the world, in contrast, are at
very low stocks to usage ratios and as
a result will help support corn prices.
The South American soybean
crop has been downsized slightly once
again and is no longer a negative fac-
tor on the market. Instead, attention is
being focused on the stocks, crush,
and exports as well as the 1990 crop
size in the U.S. Since the domestic
crush is reasonably good, larger ex-
ports of soybeans and the products are
needed to tip the price scale in favour
of higher prices.
Basis levels in Ontario have
strengthened in both old crop and
new crop soys, with old crop levels