The Rural Voice, 1999-12, Page 46Grain Markets
far, that has been impossible, leaving
barley prices in the $90 range. On the
ether hand, oats have more than one
user. If the quality is good enough,
they can be used for milling which
pays a premium. However, feed oats,
depending on test weight, are trading
for Tess than $100. All in all, cereal
grains cannot compete with corn in the
feed market.
Producers in Ontario find
themselves in a tough marketing
position this year with most producers
opting not to forward contract corn or
soybeans earlier in the year. Those
who did sell last summer only wish
they had sold more. Now, the largest
portion of grain remains to be sold and
the first thing producers need to look
at is where basis levels sit. Right now,
both corn and soybean basis is
relatively strong but. there should still
be some moderate strength by the first
of December. However, the strength
of the Canadian dollar may limit
upside potential because it looks as if
the dollar will be higher into the new.
year.
Secondly, sellers need to keep a
close eye on futures prices. Recently
we've seen prices drop to four-month
lows which would lead us to believe
that prices will have limited upside.
The U.S. producer has taken
deficiency payments on both corn and
soybeans and is caught between the
fact that he has lots of cash, courtesy
of the government, versus the fact that
he has a lot of grant yet to sell. Many
traders don't think he will sell at these
prices but if futures prices do not move
up, he can sell and end up with a price
higher than the loan rate.
I think prices will be relatively flat
throughout the winter months unless .
there is a major weather scare or surge
in demand. So, producers will have to
sell into any strength in prices rather
than waiting and hoping. Focus on
becoming more disciplined this year in
marketing and use combinations of
forward contracts and spot selling.
Then follow the same procedure year
after year. Don't change your tactics
each year because you end up chasing
the market. Remember discipline is the
key.0
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Goderich 524-5222
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Tillsonburg 842-7557
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Goderich 524-6105 5taffa/Dublin 345-2777
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DECEMBER 1999 43