The Rural Voice, 1994-09, Page 14AGRICULTURAL
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519-357-1058
10 THE RURAL VOICE
Grain Markets
Bumper crops
depress prices
Grain prices stabilized over the
last 30 days and seem to have found
temporary support areas. The most
recent USDA reports didn't have
much impact on prices with most of
the estimate already factored into
the market.
On August 1, the decision
regarding the U.S./Canada wheat
situation was formally announced
and Ontario was the major
benefactor.
CORN
Com futures seem to have found
support at $2.16 on September
futures and $2.17 on Decembcr, but
the market is not able to break
through on the topside and there is
no reason right now for it to do so.
There is a very big crop in the U.S.
that is steadily maturing, but until
the crop is actually harvested or at
least until some yields are seen,
prices have no reason to move.
The export market will be very
important over the next year in
keeping usage strong. At this point,
no exports to the former USSR have
been factored into the supply and
demand report, and if export credits
are issued by the U.S. government,
it would certainly give a boost to the
export picture. As well, feed wheat
shipments from Canada will be
limited, both because of the wheat
agreement as well as the fact that
the western corn belt has an
excellent corn crop.
In Ontario, basis levels for both
old and new crop corn have dropped
with a stronger Canadian dollar.
Most elevators are paying 75 cents
over September futures for old crop
and 40 cents over December for
new crop.
Stored corn is still being offered
and I feel there is still more to come
on to the market. The demand sure
isn't too robust but this should
change when new crop com hits the
market with prices that are lower
than fecd wheat prices.
SOYBEANS
Soybean futures prices also seem
to have found support at about
$6.50 and again the upside is fairly
limited. Reports from the U.S. say
yields this year are about equal to
the 1992 crop with more acres. The
last USDA supply and demand
report increased the projected 1995
carryover by 70 million bushels, an
amount equal to the total Ontario
production.
On the flip side, Europe is in a
drought and will need to import
soybeans and canola from North
America. Some analysts think
exports will be at a record pace this
fall with the weak U.S. dollar
playing a major part. These exports
may be enough to keep the market
from dipping further.
In Ontario, basis levels have
drifted slowly downward with the
strengthening Canadian dollar and
the oversupply of old crop soys.
Old crop basis will likely fade into
new crop levels earlier than normal
and new crop basis will hold at or
below export levels during harvest.
If a crop of nearly 70 million
bushels is realized in Ontario
this fall, exports will need to be
heavy to clear away the anticipated
glut.
FEEDGRAINS
The small grain harvest is well
under way and it appears that not
only is acreage down but yields are
rather disappointing. As a result,
barley prices that started out at
S90/mt have gained to $100/mt and
mixed grain has gained to about
$90/mt. Ontario milling quality
oats arc trading for $103 based on
38 lb. test weight.