The Rural Voice, 1989-06, Page 10ROYFARM
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8 THE RURAL VOICE
GRAIN MARKETS
MAY 17, 1989 — Over the past
month, futures markets have consoli-
dated within a narrower range than
we've seen in a while. There haven't
been any limit moves recently, which
probably reflects caution on the part of
traders in regard to weather conditions
and grain stocks.
CORN
Com futures have been gaining
strength over the past two weeks due
to the tight corn delivery situation.
Deliveries against futures have been
bought up for export. New crop corn
has held steady around the $2.55 to
$2.60 area. Planting is slower than
normal in the U.S. and there is much
concern about dryness in the Western
corn belt.
Basis levels softened slightly at
elevators in Ontario to a range 80 to
95 cents over July futures. This
reflects a surplus of corn being offered
relative to feed usage. It appears that
there will be sufficient corn stocks to
get users through the year in Ontario
with the result that basis levels should
stay relatively flat through the
remainder of the summer.
One more comment about the U.S.
situation is in regard to corn exports.
Russia has continued to purchase U.S.
corn and has asked to have the upper
limit on grain imports raised to 30
MMT. With any weather problems
affecting this year's crop, these extra
exports will serve to drop carryover
stocks even lower than now projected.
SOYBEANS
Soybean futures have traded in a range
of $7.15 to $7.50, which is a narrow
range relative to the market action of
the past year. In the latest supply/
demand report, projected carryover of
soybeans in the present crop year was
reduced by 10 million bushels. With
exports out of the U.S. being relatively
slow, there could well be enough soy-
beans to get through the year. But
again weather will play the major role
in the price levels futures will reach.
Soybean basis levels are strong in
Ontario relative to export values, with
elevator basis at 95 cents over July
futures and new crop in a range of 75
to 85 cents over November futures. I
don't see basis levels improving
substantially, especially with a large
crop projected for Ontario.
FEED GRAINS
Western barley prices have
rebounded somewhat from the lower
levels seen near the end of April. The
hard drop in late April was due to the
Canadian government's reducing of
the initial payment on barley to 85
cents per MT. However, because of
drought problems once again taking
hold throughout the prairies, many
people feel the barley acreage will be
reduced, which, in tum, may lead to
firmer prices later.
Oat prices have stabilized in the
$170.00 to $180.00/MT range and
there is no reason for oats to trade any
higher given the present supply of oats
in the world. I do, however, think
prices will stabilize in the present area.
Ontario feed grain prices have
come under some pressure as farmers
begin to clean out their bins. Ontario
barley is trading around the $140.00/
MT area FOB farm with mixed grain
trading around $145.00/MT.
In general, prices will likely
remain steady throughout the summer
unless dry weather becomes a problem
in North America. Even the percep-
tion of problems that dry weather
could cause might have quite an effect
on prices. Stay tuned to your local
market reports.0
This information is taken from
sources believed reliable, but accuracy
and completeness are not guaranteed.
Dave Gordon is a grain merchandiser
with London Agricultural Commodi-
ties, Inc. in Hyde Park, Ont., 519-
473-9333 or 1-800-265-1885.