The Rural Voice, 1988-05, Page 38PURE WATER FOR AMERICA
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36 THE RURAL VOICE
GRAIN MARKETS
OILSEEDS
The most significant recent feature
of the soybean market was the March
31 USDA planting intentions report
which showed 58 -million acres are to
be planted in 1988. However, this
data is from a survey of March 1 and
the market had risen 25 cents a bushel
in that period and rose more than 75
cents by April 22 (the time of writing).
So far, futures have gapped up after
the report and, as of the time of writ-
ing, have managed to hold above the
gap. The March 31 acreage is probab-
ly the lowest number we'll see this
year.
The April supply/demand report
dropped projected carry -out of soy-
beans by 25 -million bushels to 290 -
million bushels. This report was
coupled with a drop in Brazilian pro-
duction to 18 -million mt., which some
traders feel is still too high. Brazilian
merchandisers have already had to buy
back soybean sale contracts because
the beans were not available for
shipping.
In Canada, canola planting inten-
tions show a 26 per cent increase in
acreage which could be lowered if
moisture doesn't soon reach the prair-
ies. In Ontario, soybean acreage is
projected to be up 5 per ceni Local
soybean basis has eroded somewhat
due to the rise in the Canadian dollar.
Elevator basis for old crop soys is 80
cents over May futures, and new crop
soys are in 80 cents over November
futures. With the dollar remaining
strong and more soybeans being plant-
ed in Ontario, basis levels for new
crop will likely decline some more
during the summer.
Old crop soybeans are still moving
to the U.S. and some new crop soys
will be shipped as well. We will
likely see very volatile soybean
markets this summer and producers
should seize opportunities to lock in
some profitable prices.
With the bullish stance of the oil
and protein markets, new crop canola
prices have risen to $273/mt. at ele-
vators.
CORN
The March 31 USDA planting
intentions report for corn showed a
small increase in acreage. If the U.S.
crop size can be kept under 7 -billion
bushels, the corn carry -out in the U.S.
can be reduced another 800 -million
bushels.
We've seen the USDA reduce
government ownership (CCC stocks)
of soybeans and wheat with both
commodities showing good price
increases. For example, November
soybeans have risen $2/bushel and
July wheat has increased 70 cents/
bushel. Corn is the next commodity to
be reduced and a catalogue is being
issued by the USDA which will
include about 25 per cent of CCC
stocks. Because of this large glut of
corn, the old crop corn futures have
been unable to move and it will take
several weeks of good usage before a
significant improvement will be seen.
A plus for usage is the North Ameri-
can livestock numbers, which are at
record high levels.
In Ontario, sufficient corn is
reaching the market to keep basis
levels from improving. At one point,
basis levels dropped low enough for
some Ontario corn to move into the
U.S. market. Today, however, basis
levels are 10 cents above export
values and we have no fear of U.S.