The Rural Voice, 1998-12, Page 55i
Grain Markets
$105 - $110 per metric tonne, while
milling quality oats are still selling
for $130 per metric tonne.
The last USDA reports contained
some interesting information, not all
friendly to long term prices. The
United States corn crop grew while
usage fell and worldwide carryover
of corn increased by more than four
million tonnes. The Chinese corn
crop was left at 124 million tonnes
but their carryover increased by two
million tonnes. So, we should be
wary of additional Chinese corn
competing with United States corn in
the export market. Overall, projected
demand is nothing to get excited
about and in fact, feed use could
easily slide from today's projections
of 5.85 billion bushels. In the short
term, the United States producer is iv
control, but eventually he will have
to start selling.
The impact of the latest USDA
report for soybeans was more
psychological than anything. Traders
were generally thinking of an
increase in both production and
carryover and in fact, the USDA
reduced both. Coupled with lack of
producer selling, futures markets
moved higher quickly but there is
nothing bullish about a 365 million -
bushel carryover except for the fact
that it is not 400 million bushels.
There is also a large inventory of
unsold soybean stocks in South
America to move into the export
stream that will likely prevent prices
from pushing much higher. The only
thing that could possibly surprise the
market, would be dry weather
concerns in South America this
winter, which isn't something to
count on.
My thoughts of the past two
months haven't changed regarding
marketing strategies. I still believe
that producers need to forward sell
some old crop production as well as
some new crop 1998 production.
This year it should be advantageous
to sell first rather than be Iast.O
Information supplied by Dave Gordon,
LAC, Inc., Hyde Park, 519-473-9333.
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DECEMBER 1998 51