The Rural Voice, 1993-12, Page 23Grain Markets r
and secondly price ratios will have to
promote corn planting. Until now, the
soy/corn ratio has narrowed in from
2.9:1 and at today's ratio, many farmers
will opt to replace soybean acreage
with corn. As well, look for the
weather to be more conducive to corn
production than it was in 1993.
In Ontario, harvest is wrapping up in
Western Ontario where yields are
somewhat disappointing. The quality
of corn in the north (Grey, Bruce) has
been generally lower than normal with
a large quantity of grades 4, 5 and
sample showing up. The result may be
a crop of less than 170 million bushels
which could lead to a very tight stocks
situation next September depending, of
course, on the level of imports and
exports.
Presently, the Ontario market is
being driven by strong export demand
and tight farmer holding. Users of
truck corn are resisting the strong cash
prices in Ontario and while feed
manufacturers can substitute other
grains, industrial processors depend on
corn as their only raw product. Today,
both of these sectors are buying "hand
to mouth" and are unwilling to book
corn ahead at a good carry. They are
both of the opinion that basis levels will
eventually back off.
Basis levels in Ontario appear to be
strong, but have strengthened by only 9
cents/bu. in U.S. funds. It is the higher
futures prices and low Canadian dollar
that have combined to move Ontario
basis levels higher while in fact we
remain at the export floor.
With futures prices trending higher,
corn prices are looking fairly
respectable. All one has to do is look at
historical futures charts to realize that
prices don't stay high for very long.
They always get to a point where
cheaper feedstuffs are substituted and
prices generally grind lower over a long
period. I'm not an advisor, but when
cash prices are near $3.00/bu and new
crop 1994 prices are near $3.00/bu,
corn producers should shift some of
their risk to the users.
SOYBEANS
Like corn, the projected size of the
U.S. soybean crop caught the traders by
surprise at 1.834 billion bushels. This
figure is less than normal total use but
still larger than domestic demand. The
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'The Management and Staff of Monoway Farms of Brussels
wish aff of our customers a very Merry Christmas. It has
been our pleasure to provide you with quality breeding
stockin 1993. We look forward to serving you in 1994.
OtOWAV
FARMS
YORKSHIRE
fir LANDRACE
DUROC
HAMPSHIRE
Wayne Fear and Sons
ROP Tested - QS Approved
Purebred and Crossbred
Gilts and Boars
York-Landrace-Hamp-Duroc, F1 York x Landrace Gilts
F1 Hamp x Duroc Boars
Herd Health Good ••
R. R. 4 Brussels, Ontario
Wayne or Paul Fear
Farm: (519) 887-6477
Evenings Res.: 887-9190
Evenings Paul: 887-6477
Don Ruttan
Q.S. Rep.
887-9884
DECEMBER 1993 19