The Rural Voice, 1999-04, Page 63A
Grain Markets
feeling about corn and wheat but, I
must admit, I'm lost with regards to
soybeans although there should be
some price relationship.
I think the grain sector is more
vulnerable to any production disruption
in the next few months than the
oilseeds are. Yes, stocks of corn and
wheat are Targe but wheat acreage is
already lower and it looks like corn
acreage in the U.S. will be down by 2 -
3 million acres. We have not seen
drought problems for several years and
I'm not one to make predictions but the
last two majorL'a Nina years were 1983
and 1988, both drought years. With the
lower acreage, wheat and corn prices
will at least have some decent rallies
before early summer. If North America
has normal weather and normal yields,
corn will be better sold early. However,
if drought conditions arise, producers
will need to be patient and pick their
spots to sell.
On the other hand, soybean stocks
are huge and with a loan rate of about
$5.25 a bushel, U.S. growers will be
growing many more acres of soybeans.
When the USDA formulated the loan
rates, they thought that prices would
stay strong forever. As a result of this
miscalculation relative to corn and
wheat loan rates, it only makes sense
for the U.S. farmer to increase his
soybean acreage. Based on these facts,
it's difficult to imagine any strength in
soybean prices. Even drought condition
may not be enough to push prices much
higher.
I believe we have seen the worst of
corn prices and producers should now
be a little more selective when picking
the points at which to sell. I hope we've
put the worst of the soybean prices
behind us. Unlike with corn, you may
not get many opportunities to price out
soys a lot higher.
Over the next few weeks producers
will focus on planting but it is very
important to also be tuned into the
markets. Don't lose sight of the fact
that marketing is at least as important
as getting a crop planted and
opportunities should not be missed if
they are presented in May or June.O
Information supplied by Dave Gordon,
LAC, lnc., Hyde Park, 519-473-9333.
/1
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APRIL 1999 59