The Rural Voice, 1983-08, Page 6A
by John DePutter
(Th's column was prepared on July 13,
1983)
CATTLE ARE SLIPPING AS MANY EX-
PECTED. It was noted in this column last
month that cattle markets could suffer a
$5 to $7 decline, moving into the 3rd and
4th quarters. The drop has come sooner
and harder than many expected, with
Toronto choice steers now in the $77 to
$80 bracket. Cattlemen should take note
that if U.S. hog futures make a tragic,
spike bottom at some point before the end
of 1983, cattle could follow suit. Looking
at historical charts, you'll notice that cat-
tle futures get sucked down by major
cyclical bottoms in hogs.
U.S. HOGS & PIGS REPORT WAS
BEARISH, especially for the fall marketing
period. Total numbers were up 11 per cent
from the previous year, according to
USDA in the June 22 release. Market
animals were up 11 per cent and breeding
animals up 9 per cent. Since the report,
grain and meal prices have moved into a
hot summer rally, which could force some
U.S. producers into liquidating some of
the breeding herd. When these extra sows
FARM MARKET PERSPECTIVE
come to town, the stage will be set for the
major 31/2 year cycle spike bottom. Timing
of the big bottom will depend largely on
corn prices. It would be best for pork pro-
ducers if the wash-out bottom can be
done with my early fall, because historical
charts suggest that prices can
boomerang higher right after the final
bearish gasp.
IT'S BARLEY VERSUS CORN in the On-
tario feeding game. And barley is the clear
favourite. The western barley is cheap
because Canada will finish the year with
lower exports and ending stocks at about
5.8 million metric tons, an increase of 1.5
million over last year. Don't count on
abundant, cheap western barley next
winter, though. Canadian acreage is down
14 per cent according to Statscan.
WEATHER IS DOMINATING CHICAGO
GRAIN AND OILSEED PITS. At time of
writing, futures are hot and so is the
weather - 90 and 100 degree heat is steam-
ing up the markets. Weather rallies are
fun. Problem is, they usually peak before
you expect it. Farmers who refrain from
pricing as long as uptrends continue, are
wise. Those who sell something as soon
as they see rain forecasts and/or bearish
reversals on charts, are also wise.
SOVIET UNION IMPORTS FROM U.S.
MAY FALL TO LOWEST LEVELS IN FIVE
FRITZ CONCRETE FEEDER
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Height — 40"
Length
Width — 34"
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Galvanized steel grate:
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Zinc coated chains:
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teed
— Will not rust
— 6 piece construction easily
set up in minutes
— 12 hole feeder: will accom-
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— Galvanized lids available
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PG. 4 THE RURAL VOICE, AUGUST 1983
YEARS. The U.S Agriculture Dept. has
reduced its estimate of 1983-84 Soviet
grain imports to 30 million metric tons. Im-
ports hit a peak of 46 million, two years
ago. Meanwhile, given normal weather,
this year's total Soviet grain crop is pegg-
ed at 200 million metric tons.
EXCESS COARSE GRAIN AND OILSEED
STOCKS WILL BE REDUCED BY '84. Re-
cent releases from USDA show world car-
ryovers are declining. For world coarse
grains, ending stocks this marketing year
are estimated at 145.8 million metric tons,
but by the fall of 1984. ending stocks
should be just 109.4 million. For U.S. corn,
this year's 3.384 billion bushels and car-
ryover should dwindle to 2.065 by the fall
of '84. World soybean stocks should fall
from 19.44 million metric tons, to 15.68,
and U.S. ending stocks should be reduced
from 455 million bushels this year, to 325
million next year. These positive fun-
damental factors are in line with expecta-
tions among cycles analysts for high 1984
prices.
WHEAT STOCKS, HOWEVER, ARE STILL
BURDENSOM. The U.S. winter wheat crop
is expected to average over 40 bushels per
acre, a record. This is one factor pointing
to continuing heavy supplies of wheat.
World stocks will probably be higher next
year. And the U.S. carryover of 1.541
billion bushels could grow to over 1.600
billion by the spring of 1984.
TROUBLE IN BRAZIL: It was good news to
the Brazilian economy when a bumper 15
million metric ton plus soybean crop
came off. Despite this "the economy is
very sick", said President Joao Figueiredo
in a recent speech. The government is
desperate to acquire a $411 million loan
parcel from the International Monetary
Fund in order to repay a $400 million loan
from the Bank of International Set-
tlements ... just one example of the na-
tion's abysmal financial situation. Soy-
bean growers should watch Brazil's
economy for signs that next year's pro-
duction and exporting could be hampered.
U.S. ECONOMY CONTINUES TO GEAR
TARALAN CORPORATION
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MITCHELL, ONTARIO
NOK 1NO
519-348-9929