The Rural Voice, 1994-10, Page 19Grain Markets
premium of 50 cents/bu will have
disappeared.
New crop basis dropped to export
levels but has rebounded in some
locations to the 40 cents to 50 cents
area over December futures. This has
happened as a result of slowing
producer selling over the past month
and if producers decide not to sell right
at harvest, basis levels likely won't fall
significantly. Stats Canada is now
projecting a crop of only 175 million
bushels and if the feed industry moves
back to historical usage levels of corn,
the Ontario production will only satisfy
Ontario's domestic demand. Shipments
to the U.S. at harvest and to Eastem
Canada will put Ontario into an import
position fairly quickly. As a result,
depending on the strength of the
Canadian dollar, basis levels should
firm up once harvest is complete. In
fact, storage should pay quite well at
some point next winter.
SOYBEANS
Soybean harvest should be 15 per
cent to 20 per cent completed in the
U.S. by this weekend while in Ontario,
most of the early maturing soys should
be off and allow ample time to get
winter wheat planted.
Last week, the USDA increased the
size of the U.S. crop as well as the
resulting carryover. However, demand
for oil seeds is very strong and this fact
has not been reflected in usage figures.
In fact, export sales of soybeans are
500 per cent ahead of the same time
last year with the far East leading the
demand. Drought in China and very
dry conditions in Europe have led to a
greatly increased need for oils, espe-
cially canola oil. With the potential
demand by the export markets, it is
imperative that South America produce
a large soybean crop and right now that
doesn't look too promising. Very little
rain has fallen over much of the soy-
bean growing area of Brazil in August
or September and planting is just
around the corner.
In Ontario, we could harvest a
record soybean crop if Stats Canada
projections are correct. Logistics at
harvest will be the major challenge if
the crop is harvested over a short period
of time. Producers have forward sold a
good portion of the crop with intent that
the crop be moved over an eight week
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OCTOBER 1994 1