The Rural Voice, 1998-07, Page 18BODMIN
SWINE GENETICS
• BOARS • GILTS
All Stock Delivered
Boar Store - viewing
area located just east
of Belgrave
RR #5, Brussels, Ont. NOG 1H0
OFFICE
Phone: 519-887-9206
Fax: 519-887-9880
(Evenings)
Phil Smith 519-764-2898
Rick Beunen 519-631-2341
IFARM E, MUNICIPAL
DRAINAGE
Specializing in:
• Farm & Municipal Drainage
• Clay & Plastic Tile Installations
• Backhoe & Dozer Service
• Septic System Installations
For Quality, Experience,
& Service cal/:
Wayne Cook
(519) 236-7390
R.R2 Zurich, Ont.
NOM 2T0
PARKER
PARKER
L I M ITE C)
14 THE RURAL VOICE
Grain Markets
Down, down, down!
Lately, it's been down, down,
down in all markets whether it's grain,
stocks or currency. The grain markets
are mirroring current and projected
weather patterns which, for the past
few weeks have shown adequate
rainfall with moderate temperatures.
The stock market has finally begun to
correct lower and the Canadian dollar
is near all time lows.
The most recent supply/demand
reports showed very little change from
the May 12 reports so there was little
to no reaction by traders. Instead, the
focus is on the weather — up one day
on the thought a high pressure ridge is
building, then down the next on good
rainfall coverage or a wet six to 10 -
day forecast.
Producers must have firm
marketing plans in place in markets
like this. Don't get caught by the fear
syndrome and don't get caught
looking for an extra penny or so,
especially if you've missed the big
picture. Holders of old crop grain
today are counting on weather
problems to push prices higher and
although that's a personal prerogative,
there are better alternatives available.
CORN
The USDA made no changes in the
latest supply/demand report and the
next major report will be the final
acreage report on June 30. So far, the
supply/demand report figures are
"plugged" using trend line yields as
well as rather absurd export and feed
usage numbers. They are showing
1998-99 exports at 100 million
bushels higher than this year and feed
use increasing by 50 million bushels.
The U.S. will be hard pressed to
increase exports to Asia and
domestically, wheat prices are close
enough to corn prices to encourage the
feeding of wheat on a fairly large
scale. With all of these numbers,
prices could could go lower. The wild
card is on the production side. If a
drought does develop and yields are
cut, prices will go higher. The next 30
days (July 20) will tell the tale. If
there is no sign of dry weather by this
date, the market run is likely over.
In Ontario, old crop basis levels are
weak in relative terms and until the
current glut of com is used up, values
will not improve. This could take us
into late July or August before we see
much change. The bid for the forward
months are certainly not too strong, an
indication that users are fairly well
covered. As far as new crop basis is
concerned, the tone is quite neutral
simply because very little business has
been done to date. Once the wheat crop
is harvested, we will have a better idea
of space availability for both the corn
and soybean crops. At present, new
crop basis is still holding above export
levels but below import levels.
The last two years, we've had
import basis levels at harvest time, an
abnormality from an historical point
of view and what this has done is add
to the supply of Ontario corn. As I've
said many times, when a market is at
import levels it will eventually go to
export levels and vice versa. Produ-
cers should be sellers when the market
wants product i.e. at import levels.
SOYBEANS
The USDA made a slight
adjustment to the 1998-99
supply/demand report in increasing
the carryover by 15 million bushels.
They increased crush to a record but
reduced exports to the current year's
level which is suspect given the
current Asian economic woes and the
huge supply of cheap South American
soys. Sparks Commodities recently
increased their acreage projection by
one million acres, but there was little
effect on the market because it was
focused on weather. The storyline for
soybeans is very similar to corn in that
weather will play a very crucial role in
determining whether trendline yields
are achieved. If record production
becomes reality, prices will have
difficulty holding, with South Amer-
ica planting another crop right after
North America's crop is harvested.
In Ontario, basis levels are holding
quite well given the fact that
producers have only two months to
market the balance of the stored crop.
As I write this article, one of the