The Rural Voice, 1988-07, Page 16GRAIN MARKETS
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14 THE RURAL VOICE
SOYABEANS
Markets have turned into a raging
bull over the past few weeks. Soya -
beans have moved much higher with
some minor setbacks on profit-taking.
Corn has also moved much higher, but
has had no corrections on the down-
side. The markets have traded higher -
based on drought fears in the U.S.
midwest and the damage that may
result from this lack of moisture.
Coupled with a projected low carry-
over of soyabeans, traders have really
become bullish and it still appears that
no one wants to sell the market other
than to take profits.
Soyabean plantings in Ontario this
year were definitely higher than in
1987, but the dry weather has resulted
in spotty emergence and slow growth.
However, Ontario will still likely have
a record crop of soyabeans. Western
Canada is still experiencing hot, dry
weather in spots, which is the driving
force behind the canola and feed grain
markets. As a consequence, canola no
longer provides a cheaper optional
protein than soyabeans. We are going
to see very volatile markets for some
time to come, much like we've seen
over the past few weeks.
As producers you should seriously
look at having a good portion of your
soyabeans sold at these levels. If your
crop is looking good, you might be
advised to keep sold up because the
futures have inversed. In other words,
the nearby months are trading higher
than the deferred months and in this
type of scenario it doesn't pay to store
the crop.
CORN
Recently, corn has been an extremely
strong market with the July contract
moving from 2.141/2/bu. on May 27
to a high of $3.541/2/bu on June 23.
New crop corn futures have climbed
almost as much to a high of $3.653/4
on June 23.
Basis levels on old crop corn have
strengthened because of fairly tight
producer holding while new crop corn
is remaining fairly stable. I've told
some producers it's better to leave
some money on the table than to take
50 cents per bushel less. In other
words, $4/bu corn is very profitable
and producers are better to take this
price than let prices drop to $3.50/bu.
As a result of corn price increases,
the soyabeans/corn ratio has come
back into line at 2.82:1. Other feed
grains have climbed in price as well.
OATS AND BARLEY
Oats are leading the way because
of poor crop prospects in the U.S.,
Western Canada, and the Scandina-
vian countries. In Ontario, a potential
quality problem with test weight could
make good quality oats worth a high
premium. Now, depending on quality,
oats are trading from $130-$200/mt.
Barley and mixed grain prices
have climbed to levels that are almost
double 1987 harvest prices. Both
commodities are trading in the $120-
$130/mt area.
Western barley is also staying very
strong as crop conditions deteriorate in
Western Canada.
In summary, the grain markets are
continuing in a bull phase but produc-
ers should not get too greedy — and
remember that markets can and
probably will correct down sharply
and quickly.0
This information is taken from
sources believed reliable, but accuracy
and completeness is not guaranteed.
Dave Gordon is a grain merchan-
diser with London Agricultural Com-
modities, Inc. in Hyde Park, Ontario,
519-473-9333 or 1-800-265-1885.